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Category: Snap-on (SNA)
Date: 13 March 2021 Stock price of Snap-on (SNA): $217.35 Market Capital of Snap-on: $11.8 billion We take a look at the 4th quarter 2020 earnings report of Snap-on (SNA) a leading global innovator, manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions for professional users performing critical tasks
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Our fourth quarter was another encouraging period in which Snap-on continued its upward trajectory, extending to new heights in both sales and earnings achieved directly against a disruption of historic proportion all while prioritizing the health and safety of our constituents- said Nick Pinchuk, Snap-on chairman and chief executive officer. "
More About Snap-on (SNA)
Snap-on Incorporated is a leading global innovator, manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions for professional users performing critical tasks. Products and services include hand and power tools, tool storage, diagnostics software, information and management systems, shop equipment and other solutions for vehicle dealerships and repair centers, as well as for customers in industries, including aviation and aerospace, agriculture, construction, government and military, mining, natural resources, power generation and technical education.
Snap-on also derives income from various financing programs to facilitate the sales of its products. Products and services are sold through the company’s franchisee, company-direct, distributor and internet channels. Founded in 1920, Snap-on is a $3.7 billion, S&P 500 company headquartered in Kenosha, Wisconsin.
Snap-on also derives income from various financing programs to facilitate the sales of its products. Products and services are sold through the company’s franchisee, company-direct, distributor and internet channels. Founded in 1920, Snap-on is a $3.7 billion, S&P 500 company headquartered in Kenosha, Wisconsin.
Overview of Snap-on 4th quarter 2020 earnings report
- Net sales of $1,074.4 million in the fourth quarter of 2020 increased $119.2 million, or 12.5% from 2019 levels, reflecting a $102.1 million, or 10.6%, organic sales gain, $9.6 million of favorable foreign currency translation, and $7.5 million of acquisition-related sales.
- Operating earnings before financial services for the quarter of $216.2 million, or 20.1% of sales, including the impacts from $2.8 million of direct costs associated with COVID-19, $1.5 million of unfavorable currency effects and $1.0 million of exit and disposal costs for actions outside of the United States (“restructuring charges”), compared to $171.4 million, or 17.9% of sales in 2019. Excluding the restructuring charges, operating earnings before financial services in 2020, as adjusted, of $217.2 million, or 20.2% of sales, increased $45.8 million, or 26.7%, from 2019 levels.
- Financial services revenue in the quarter of $93.4 million increased $9.5 million from 2019 levels; financial services operating earnings of $68.5 million compared to $62.2 million last year.
- Consolidated operating earnings for the quarter of $284.7 million, including $2.8 million of direct costs associated with COVID-19, $1.3 million of unfavorable currency effects and $1.0 million of restructuring charges, compared to $233.6 million last year. As a percentage of revenues (net sales plus financial services revenue), consolidated operating earnings were 24.4% and 22.5% in the fourth quarters of 2020 and 2019, respectively. Excluding the restructuring charges, consolidated operating earnings in 2020, as adjusted, of $285.7 million, or 24.5% of revenues, increased $52.1 million, or 22.3%, from 2019 levels.
- The fourth quarter effective income tax rate was 21.8% in 2020 and 22.3% in 2019.
- Net earnings in the quarter of $208.9 million, or $3.82 per diluted share, compared to $170.6 million, or $3.08 per diluted share, a year ago. Excluding the restructuring charges, net earnings, as adjusted, were $209.9 million in 2020, or $3.84 per diluted share.
Snap-on management commentary on their 4th quarter 2020 earnings
KENOSHA, Wis. — February 4, 2021 — Snap-on Incorporated (NYSE: SNA), a leading global innovator, manufacturer and marketer of tools, equipment, diagnostics, repair information and systems solutions for professional users performing critical tasks, today announced 2020 operating results for the fourth quarter and full year.
“Our fourth quarter was another encouraging period in which Snap-on continued its upward trajectory, extending to new heights in both sales and earnings achieved directly against a disruption of historic proportion all while prioritizing the health and safety of our constituents,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “We believe our performance clearly confirms the continuing and abundant opportunities along our runways for growth and improvement, demonstrates the strength inherent in our operations, and testifies to the resilience of our enterprise, supported by our franchise network, by our capacity for critical innovation, and by our deep connection with makers and fixers. We’re further heartened that the gains were achieved in the challenging COVID environment, while still expanding our special advantage in our products, in our brands, and in our people. Those elevated capabilities enabled us to reach higher in the quarter and will serve as an effective base for attaining increased progress as we move forward through 2021. Finally, I want to celebrate our franchisees, our associates, and our customers who have labored at their essential tasks, especially in repair shops, in warehouses, and in factories. Their dedication and hard work have helped preserve our society during the time of the virus an effort that will be remembered for years to come.”
“Our fourth quarter was another encouraging period in which Snap-on continued its upward trajectory, extending to new heights in both sales and earnings achieved directly against a disruption of historic proportion all while prioritizing the health and safety of our constituents,” said Nick Pinchuk, Snap-on chairman and chief executive officer. “We believe our performance clearly confirms the continuing and abundant opportunities along our runways for growth and improvement, demonstrates the strength inherent in our operations, and testifies to the resilience of our enterprise, supported by our franchise network, by our capacity for critical innovation, and by our deep connection with makers and fixers. We’re further heartened that the gains were achieved in the challenging COVID environment, while still expanding our special advantage in our products, in our brands, and in our people. Those elevated capabilities enabled us to reach higher in the quarter and will serve as an effective base for attaining increased progress as we move forward through 2021. Finally, I want to celebrate our franchisees, our associates, and our customers who have labored at their essential tasks, especially in repair shops, in warehouses, and in factories. Their dedication and hard work have helped preserve our society during the time of the virus an effort that will be remembered for years to come.”
Snap-on (SNA) stock price history over the last 5 years
The image below shows the stock price history of Snap-on (SNA) over the last 5 years. And its been a good time for Snap-on stockholders with the stock increasing by 39.9% over the last 5 years.
The stock of Snap-on is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Snap-on stock is very positive at this point in time.
The stock of Snap-on is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Snap-on stock is very positive at this point in time.
Latest stock valuation of Snap-on
So what is Snap-on stock worth based on their 4th quarter 2020 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for Snap-on at $254.60 a stock.
We therefore believe the stock of Snap-on is undervalued at its current price of $217
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $254.60, thus a good entry point into Snap-on w would be at $228.60 or below.
We expect the stock of Snap-on to kick up from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is undervalued.
We therefore believe the stock of Snap-on is undervalued at its current price of $217
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $254.60, thus a good entry point into Snap-on w would be at $228.60 or below.
We expect the stock of Snap-on to kick up from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is undervalued.
Next earnings release of Snap-on
It is expected that Snap-on will release their 1st quarter 2021 earnings report in early June 2021
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