Will SNA's Operational Agility, RCI Plan & Innovations Fuel Growth?

Snap-on Incorporated’s SNA growth strategy focuses on three critical areas, namely enhancing the franchise network, improving relationships with repair shop owners and managers, and expanding critical industries in the emerging markets. The company is dedicated to various strategic principles and processes aimed at creating value in areas like Rapid Continuous Improvement (RCI). 

The RCI process is designed to enhance organizational effectiveness and minimize costs, along with helping Snap-on 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. Management remains on track with its value-creation plans. It is focused on customer connection and innovation.

Snap-on is poised well, given its innovative hardware, particularly with the proprietary comprehensive database. Its specialty torque business within the 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. 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, Valuation and Estimates

Shares of Snap-on have gained 9.8% in the past six months compared with the industry’s growth of 4.8%.

From a valuation standpoint, SNA trades at a forward price-to-earnings ratio of 17.12X compared to the industry’s average of 16.53X.

The Zacks Consensus Estimate for SNA’s 2025 earnings indicates a year-over-year drop of 2% but the same for 2026 implies a rise of 5.7%. The company’s EPS estimate for 2025 and 2026 has moved up in the past 30 days.

Snap-on stock currently carries a Zacks Rank #3 (Hold).

Key Consumer Discretionary Picks

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

Gildan Activewear, a manufacturer of premium quality branded basic activewear, sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. 

The consensus estimate for Gildan Activewear’s current financial-year sales indicates growth of 4.5% from the year-ago figure. GIL has a trailing four-quarter earnings surprise of 2.6%, on average. 

Ralph Lauren, a designer and distributor of premium lifestyle products, including apparel, accessories and footwear, currently carries a Zacks Rank #2 (Buy) at present. 

Ralph Lauren has a trailing four-quarter earnings surprise of 9.8%, on average. The Zacks Consensus Estimate for RL’s current financial-year sales indicates growth of 9.5% from the year-ago figure.

Royal Caribbean carries a Zacks Rank of 2 at present. RCL has a trailing four-quarter earnings surprise of 6%, on average.

The Zacks Consensus Estimate for RCL’s 2025 sales and EPS indicates an increase of 8.9% and 32.5%, respectively, from the year-ago levels.

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

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