Snap-on to Report Q3 Earnings: How is the Stock Placed Ahead?

Snap-on Incorporated SNA is likely to register bottom-line growth when it reports third-quarter 2024 earnings on Oct. 17, before the opening bell. The Zacks Consensus Estimate for revenues is $1.2 billion, which indicates a drop of 0.3% from the year-ago quarter’s level.

The consensus estimate for quarterly earnings has been stable over the past 30 days at $4.58 per share and indicates an increase of 1.6% from the year-earlier quarter’s tally.

The company has an average trailing four-quarter earnings surprise of 1.7%. It delivered a negative earnings surprise of 0.6% in the last reported quarter. 

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.

Key Factors to Influence SNA’s Q3 Results

Snap-on has been benefiting from continued positive business momentum and contributions from its strategic efforts. The company’s business model is focused on enhancing value-creation processes, which improves safety, quality of service, customer satisfaction and innovation. SNA concentrates on enhancing the franchise network, improving relationships with repair shop owners and managers, and expanding critical industries in emerging markets. 

Snap-on is on track with the Rapid Continuous Improvement (RCI) process and other cost-reduction initiatives. The RCI process is designed to enhance organizational effectiveness and minimize costs, besides aiding Snap-on to boost sales and margins, by generating savings. Savings from the RCI initiative reflect gains from continued productivity and process improvement plans. The company has been investing in new products and increasing brand awareness. These attributes have been contributing to its quarterly performance, which is expected to have continued in the to-be-reported quarter.

Our model estimates sales growth of 3% for Commercial & Industrial Group and 2.1% for Repair Systems & Information Group for the third quarter. 

However, Snap-on has been witnessing ongoing challenges due to the macroeconomic environment, including inflationary pressures and other headwinds. Rising cost inflation, stemming from higher raw material expenses and other costs, has been hurting SNA’s performance. Additionally, the company’s Tools Group performance has been soft for a while. We estimate a 5.9% decline in the Tools Group for the third quarter.

What the Zacks Model Predicts for SNA

Our proven model doesn’t conclusively predict an earnings beat for Snap-on this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Snap-on has an Earnings ESP of 0.00% and a Zacks Rank of 3.

Valuation Picture of SNA Stock

From a valuation perspective, Snap-on offers an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 14.80x, which is below the five-year high of 18.60x and the Tools - Handheld industry’s average of 15.93x, the stock offers compelling value for investors seeking exposure to the sector.

The recent market movements show that SNA’s shares have gained 8.5% in the past three months compared with the industry's 0.6% growth.

Stocks Poised to Beat Earnings Estimates

Here are some companies, which according to our model, have the right combination of elements to post an earnings beat:

Disney DIS currently has an Earnings ESP of +2.70% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here. 

DIS is likely to register bottom and top-line growth when it reports fourth-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $22.6 billion, indicating a 6.6% increase from the figure reported in the year-ago quarter. 

The consensus estimate for DIS’ fiscal fourth-quarter earnings is pegged at $1.09 per share, implying 32.9% growth from the year-ago quarter’s actual. The consensus mark has been unchanged in the past 30 days.

MGM Resorts International MGM currently has an Earnings ESP of +0.46% and a Zacks Rank of 3. MGM is likely to register top-line growth when it reports third-quarter 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $4.3 billion, indicating 7.2% growth from the figure reported in the year-ago quarter.

The consensus estimate for MGM Resorts’ third-quarter earnings is pegged at 61 cents a share, implying a 4.7% decrease from the year-earlier quarter. The consensus mark has moved down a couple of cents in the past 30 days.

lululemon athletica LULU currently has an Earnings ESP of +0.60% and a Zacks Rank of 3. LULU is likely to register top-line growth when it reports third-quarter fiscal 2024 results. The Zacks Consensus Estimate for its quarterly revenues is pegged at $2.4 billion, indicating 6.8% growth from the figure reported in the year-ago quarter.

The consensus estimate for LULU’s third-quarter earnings is pegged at $2.73 a share, implying a 7.9% increase from the year-earlier quarter. The consensus mark has been stable in the past 30 days.

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Snap-On Incorporated (SNA): Free Stock Analysis Report
 
MGM Resorts International (MGM): Free Stock Analysis Report
 
The Walt Disney Company (DIS): Free Stock Analysis Report
 
lululemon athletica inc. (LULU): Free Stock Analysis Report

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