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Assessing Snap-on (SNA) Valuation After Solid Quarterly Beat On Revenue And Operating Income

Simply Wall St · 4d ago

Snap-on (SNA) recently reported quarterly results, with revenue up 3.6% year on year and adjusted operating income ahead of analyst forecasts. The stock has moved about 6.5% higher since the release.

See our latest analysis for Snap-on.

At a share price of $352.58, Snap-on’s recent 6.5% post earnings move sits alongside a 90 day share price return of 6.3% and a 5 year total shareholder return of 133.7%. This points to momentum that has been building rather than fading.

If Snap-on’s steady performance has you thinking about where else tools and equipment demand might support returns, it could be worth scanning aerospace and defense stocks as a next step.

With Snap-on trading at $352.58, sitting close to analyst targets and carrying an implied intrinsic discount, the key question is whether this tools specialist is still undervalued or whether the market is already pricing in future growth.

Most Popular Narrative: 2.3% Undervalued

Snap-on’s most followed narrative points to a fair value close to the current US$352.58 price, suggesting only a small valuation gap.

The growing number and average age of vehicles on the road continues to drive recurring demand for maintenance and repair tools, especially as households spend more on vehicle repairs and vehicles are kept longer. This structural trend underpins steady top-line growth and supports stable to improving gross margins.

Read the complete narrative.

Curious what underpins that small discount? The narrative focuses on gradual revenue gains, slightly higher margins, and a future earnings multiple that remains below the sector level. Result: Fair Value of $361 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, this hinges on Snap-on keeping pace with EV and ADAS tools and managing pricing pressure from lower cost rivals that could squeeze margins.

Find out about the key risks to this Snap-on narrative.

Build Your Own Snap-on Narrative

If you see the numbers differently or would rather test your own assumptions, you can build a custom Snap on view in just a few minutes: Do it your way.

A great starting point for your Snap-on research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

Looking for more investment ideas?

If Snap-on has sharpened your interest, do not stop here. Broaden your watchlist with ideas that tap into different themes, sectors, and income profiles.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.