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Here’s What Makes Snap-On The ‘Top Idea’ At Baird

Courtesy of Benzinga.

Here's What Makes Snap-On The 'Top Idea' At Baird

Snap-on Incorporated (NYSE: SNA) remains Baird’s top pick, with analyst David Leiker reiterating an Outperform rating and $197 price target.

Leiker expects shareholder returns to approach 20-percent annual through 2020.

The analyst’s view was reaffirmed by a recent shift in investor sentiment, with a new theme being long investors “looking to get more involved.”

The shift followed a strong second quarter earnings report on July 20. The company reported EPS of $2.60 compared with $2.36 in the same quarter last year and $921.4 million in sales, up about $50 million year over year.

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Before the report, “virtually 100 percent of inbound calls” Leiker received were negative. Leiker notes that 10 percent of shares are still short.

Snap-on’s business model has proven to be very profitable, with a 21-percent return on equity for its core business and near 30 percent for Snap-on Credit. The company has been the Street’s estimates every quarter for the past seven years.

Moving forward, Leiker will be looking to see rising Tools Group growth, stable-to-down originations and stable credit metrics.

Keep up with earnings season and analyst coverage in real-time with Benzinga Pro.

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Image Credit: By Dwight Burdette – Own work, CC BY 3.0, via Wikimedia Commons

Latest Ratings for SNA

Date Firm Action From To
Apr 2017 Oppenheimer Initiates Coverage On Outperform
Jun 2016 CL King Initiates Coverage on Buy
Oct 2015 Longbow Research Upgrades Buy

View More Analyst Ratings for SNA


View the Latest Analyst Ratings

Posted-In: Baird David LeikerAnalyst Color Long Ideas Reiteration Top Stories Analyst Ratings Trading Ideas Best of Benzinga


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