Snap-on Incorporated SNA stock has jumped 28.2% in the past six months. This growth comfortably has outpaced the broader Consumer Discretionary sector’s return of 12.2% and the Zacks Tools - Handheld industry’s rally of 10.7% in the same period. SNA shares also surpassed the S&P 500 index’s appreciation of 8.4% in the six months.

Currently priced at $337.67, Snap-on stock is trading at 9.7% to its 52-week high of $373.90, reached on Nov. 27. However, it is trading at a 33.5% premium to its 52-week low mark.

SNA’s Growth Efforts Seem Promising

Snap-on has been progressing well on its strategic efforts. The company 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 Rapid Continuous Improvement (RCI) process has been on track. The RCI process is aimed at enhancing organizational effectiveness, reducing costs and boosting sales and margins. 

Savings from this initiative come from continuous productivity and process-improvement plans. Management intends to boost customer services, along with enhancing manufacturing and supply-chain capabilities, through the RCI initiatives and further investments.

The company has been investing in bringing new products and increasing brand awareness across the world. Additionally, SNA’s robust business model helps enhance value-creation processes, which in turn improve safety, quality of service, customer satisfaction and innovation. Snap-on continues investing in the tools and equipment. 

We note that the Tools Group is focused on product development, manufacturing changes and selling efforts in the near term. The critical industries remain robust and have various opportunities. Torque also continues to rise in importance with critical industry customers. The company’s industrial division has been doing well, with an upward trajectory and robust profitability, and catering to the growing demand for customized solutions.

SNA's Price Performance

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SNA’s Earnings Estimate Revisions

Given the tailwinds surrounding the stock, the Zacks Consensus Estimate for 2024 and 2025 has been northbound.

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In the past 60 days, the consensus estimate for earnings per share (EPS) has risen 0.3% to $19.33 for 2024 and 0.4% to $20.03 for 2025. This implies corresponding year-over-year earnings growth of 3% and 3.6%, respectively, for the aforesaid years. The consensus mark for SNA’s sales indicates a rise of 3.2% year over year for 2025.

SNA Stock’s Valuation

Snap-on stock is trading at a discount valuation relative to the industry. Going by the price/earnings ratio, the stock is currently trading at 16.88 on a forward 12-month basis, lower than 17.02 for the industry. Also, the stock is trading lower than its five-year high of 18.63. A Value Score of B further adds strength.

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Conclusion

Moving ahead, management expects the company’s markets and operations to have considerable resilience against the uncertainties of the operating landscape. SNA anticipates progress along its defined runways for growth. 

Snap-on expects 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. A Zacks Rank #2 (Buy) for SNA supports our thesis.

Other Key Consumer Discretionary Picks

We have highlighted three other top-ranked stocks, namely, Planet Fitness PLNT, Gildan Activewear GIL and Royal Caribbean RCL.

Planet Fitness, the leading franchisor and operator of fitness centers, sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. 

Planet Fitness has a trailing four-quarter earnings surprise of 7.8%, on average. The Zacks Consensus Estimate for PLNT’s current financial-year sales indicates growth of 8.9% 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 5.4%, on average. 

The consensus estimate for Gildan Activewear’s current financial-year EPS indicates growth of 15.6% from the year-ago figure.

Royal Caribbean carries a Zacks Rank of 2 at present. RCL has a trailing four-quarter earnings surprise of 16.2%, on average.

The Zacks Consensus Estimate for RCL’s 2024 sales and EPS indicates an increase of 18.6% and 71.6%, respectively, from the year-ago levels.

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