Global Power Tools: Latest US Tariff Announcement Removes Overhang

研报英文原文证据摘录

Global Power Tools: Latest US Tariff Announcement Removes Overhang

026E assuming no further deterioration of US reciprocal tariff policy from 2026E. We project a 3-year-

forward EPS CAGR of 16% through 2028E after slower growth of 9% in 2025E under the US reciprocal tariff. Key drivers

include: 1) GS is likely to deliver teens revenue growth for core hand tools on general maintenance centric in overseas markets

like North America, which is quite resilient; 2) a strong ~50% revenue CAGR to over US$1bn in 2028 for electric power tools

and energy storage system for low base; and 3) plant relocation into ASEAN from China to lower production costs and tariff

(versus rivals that are China production dependent) for the US/EU markets.

Risks

Although our quant model rates GS shares as High Risk, we do not assign a High Risk rating due to removal of the overhang for

logistics and materials cost pressure. Key downside risks that could cause the shares to trade below our target price include: 1)

a worse-than-expected macro slowdown in the US/EU amid an interest rate upcycle; and 2) RMB appreciation versus USD as

GS earnings are negatively correlated with RMB appreciation.

Stanley Black & Decker

(SWK.N; US$87.41; 1; 23 Jul 26; 16:00)

Valuation

We value SWK shares at US$100 based on a 18x 2026E PE, which is based on -0.5SD to mean from prior 19-20x PE in 2025

after release of 2025 results. We employ the -0.5SD to mean as the benchmark based on: 1) 2026 operating / gross

margins would continue improving thru better efficiency and cost reduction program, 2) the industry will likely resume a

normal growth from 2026, which would apply all peers, and SWK would likely surpass industry growth. In addition, the worst

for profitability downcycle in 2023 should be behind us.