Snap-on Up 17.7% in 6 Months: Should You Buy, Hold or Sell the Stock?

Snap-on Incorporated SNA stock seems to be in the limelight for a while, with shares rising 17.7%, comfortably outperforming the broader Consumer Discretionary sector’s gain of 2.9% and the Zacks Tools - Handheld industry, which rose 5.5% in the past six months. SNA’s shares have also surpassed the S&P 500 index’s drop of 1.4% in the six-month period.

The stock seems to be in good shape, thanks to its solid business strategies. The company has been benefiting from its value-creation processes and Rapid Continuous Improvement (RCI) initiatives. Its business model also seems encouraging. Let’s delve deeper.

Snap-on’s Growth Efforts Yielding

SNA has been enhancing the franchise network, improving relationships with repair shop owners and managers, and expanding into critical industries in emerging markets. Management’s emphasis on the RCI process has been on track. 

The RCI process is designed to enhance organizational effectiveness and minimize costs, along with helping Snap-on to boost sales and margins and generate savings. Savings from the RCI initiative reflect gains from the continuous productivity and process improvement plans. 

Snap-on’s business trends have been robust. The company’s new models entered the market with the latest drivetrains, motor configurations and high-tech electrical systems managing a neural network of sensors, enabling driver-assisted vehicle autonomy. It is focused on customer connection and innovation. Management expects the vehicle repair market to be sturdy. 

Snap-on is poised well, given its innovative hardware, particularly with the proprietary comprehensive database. Its specialty torque business of Commercial & Industrial Group progresses well. The company has an array of new products, including its heavy-duty cordless torque multiplier, known as the CTM 800, delivering torque from 160 foot-pounds. This tool has been expanding in torque.

Management expects SNA’s markets and operations to have considerable resilience against the uncertainties of the operating landscape. It anticipates continued progress by leveraging capabilities in the automotive repair arena, as well as expanding its customer base in automotive repair and across geographies, including critical industries. For 2025, SNA anticipates progress along its defined runways for growth. Such strengths are likely to bolster sales and profits.

SNA's Price Performance

Image Source: Zacks Investment Research

Bumps in SNA’s Growth Trajectory

Snap-on remains prone to macroeconomic headwinds, including geographic challenges in critical industries. The company’s performance has been soft in various regions. Weak performance in China is acting as a deterrent. In addition, challenges in automotive remain concerning. 

Rising cost inflation, stemming from higher raw material expenses and other costs, is another headwind that is hurting SNA’s performance. In addition, the company has been witnessing higher operating expenses owing to increased personnel and other associated costs. Operating expenses rose 3.5% year over year. The metric, as a percentage of net sales, saw a rise of 90 basis points in the most recent quarter.

SNA Stock’s Valuation

Going by the price/earnings ratio, Snap-on stock is currently trading at 16.89 on a forward 12-month basis compared with 16.71 for the industry. The stock is trading lower than its five-year high of 18.63.

Conclusion

Although Snap-on’s challenges remain concerning, its strategic initiatives have been aiding results. In the most recent quarter, the company’s top and bottom lines beat the Zacks Consensus Estimate and both metrics increased year over year.

The Zacks Consensus Estimate for SNA’s 2025 sales and earnings per share (EPS) indicates a rise of 2.9% and 1.3%, respectively, year over year. For 2026, the consensus mark for sales and EPS implies a jump of 4.1% and 7%, respectively, year over year. This highlights analysts’ confidence in this Zacks Rank #3 (Hold) stock.

Key Consumer Discretionary Picks

We have highlighted three better-ranked stocks, namely, Ralph Lauren RL, Gildan Activewear GIL and Royal Caribbean RCL.

Ralph Lauren, a designer and distributor of premium lifestyle products, including apparel, accessories and footwear, currently carries a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

Ralph Lauren has a trailing four-quarter earnings surprise of 6.5%, on average. The Zacks Consensus Estimate for RL’s current financial-year sales indicates growth of 5.8% from the year-ago figure.

Gildan Activewear, a manufacturer of premium quality branded basic activewear, carries a Zacks Rank of 2 at present. GIL has a trailing four-quarter earnings surprise of 5.3%, on average. 

The consensus estimate for Gildan Activewear’s current financial-year sales indicates growth of 4.4 .% from the year-ago figure.

Royal Caribbean carries a Zacks Rank of 2 at present. RCL has a trailing four-quarter earnings surprise of 15.7%, on average.

The Zacks Consensus Estimate for RCL’s 2025 sales and EPS indicates an increase of 9% and 26.7%, respectively, from the year-ago levels.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research