Zacks Investment Research downgraded shares of Stanley Black & Decker Inc (SWK) from NEUTRAL to UNDERPERFORM on July 27, 2012, with a target price of $60.00.
A mixture of positive and negative announcements during the 2Q conference call, though increased our confidence on the long-term prospects of Stanley Black & Decker, it also raised concerns in the near term. Several positives like enhanced cost synergy expectation from Black & Decker acquisition, agreement for the Infastech acquisition, a 20% increase in dividend rates, a new share buyback program, and a focus on organic growth initiatives all bode well for the company. However, taking into account the company's dismal performance in the second quarter, we downgraded the stock from Neutral to an Underperform recommendation. Earnings per share in the second quarter fell $0.14 year over year to $1.32 and lagged behind the Zacks Consensus Estimate of $1.52. Moreover, management lowered its 2012 guidance expecting a persistently negative currency translation impact.
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