New Britain, Connecticut-based Stanley Black & Decker, Inc. (SWK) manufactures and provides tools and related accessories, engineered fastening systems and several other items and services. Valued at a market cap of $10.6 billion, the company serves a wide range of industries, including automotive, manufacturing, electronics, construction, and aerospace, among others. 

This industrial tools and accessories provider has considerably lagged behind the broader market over the past 52 weeks. Shares of SWK have declined 26.1% over this time frame, while the broader S&P 500 Index ($SPX) has gained 21.9%. Moreover, on a YTD basis, the stock is down 14.4%, compared to SPX’s 7.8% uptick. 

Narrowing the focus, SWK’s underperformance looks more evident when compared to the Industrial Select Sector SPDR Fund’s (XLI) 24.1% return over the past 52 weeks and 14.4% rise on a YTD basis. 

On Jul. 29, SWK’s shares plunged 7.2% after it delivered mixed Q2 earnings results. Due to weaker sales across both of its reportable segments, the company's overall revenue declined 2% year-over-year to $3.9 billion, missing consensus estimates by 1%. Moreover, its adjusted gross margin dropped by 170 basis points, driven by the impact of tariffs and lower volumes. Its adjusted SG&A expenses increased compared to the year-ago quarter, which resulted in a 25.9% annual drop in its adjusted EBITDA to $318.2 million. However, its adjusted EPS of $1.08 handily topped the consensus estimates. 

For the current fiscal year, ending in December, analysts expect SWK’s EPS to grow 5.1% year over year to $4.58. The company’s earnings surprise history is promising. It exceeded the consensus estimates in each of the last four quarters.

Among the 16 analysts covering the stock, the consensus rating is a "Moderate Buy” which is based on seven “Strong Buy,” eight "Hold,” and one “Strong Sell” rating. 

This configuration is more bullish than two months ago, with two analysts suggesting a “Strong Sell” rating. 

On Aug. 4, Wells Fargo & Company (WFC) analyst Joseph O’Dea maintained an "Equal Weight" rating on SWK and raised its price target to $75, implying a 9.1% potential upside from the current levels. 

The mean price target of $83.92 represents a 22.1% premium from SWK’s current price levels, while the Street-high price target of $102 suggests an ambitious upside potential of 48.4%.