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1. Company Snapshot

1.a. Company Description

Snap-on Incorporated manufactures and markets tools, equipment, diagnostics, and repair information and systems solutions for professional users worldwide.It operates through Commercial & Industrial Group, Snap-on Tools Group, Repair Systems & Information Group, and Financial Services segments.The company offers hand tools, including wrenches, sockets, ratchet wrenches, pliers, screwdrivers, punches and chisels, saws and cutting tools, pruning tools, torque measuring instruments, and other products; power tools, such as cordless, pneumatic, hydraulic, and corded tools; and tool storage products comprising tool chests, roll cabinets, and other products.


It also provides handheld and computer-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, original equipment manufacturer purchasing facilitation services, and warranty management systems and analytics.In addition, the company offers solutions for the service of vehicles and industrial equipment that include wheel alignment equipment, wheel balancers, tire changers, vehicle lifts, test lane equipment, collision repair equipment, vehicle air conditioning service equipment, brake service equipment, fluid exchange equipment, transmission troubleshooting equipment, safety testing equipment, battery chargers, and hoists, as well as after-sales support services and training programs.Further, it provides financing programs to facilitate the sales of its products and support its franchise business.


The company serves the aviation and aerospace, agriculture, construction, government and military, mining, natural resources, power generation, and technical education industries, as well as vehicle dealerships and repair centers.Snap-on Incorporated was founded in 1920 and is based in Kenosha, Wisconsin.

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1.b. Last Insights on SNA

The recent 3-month performance of Snap-on Incorporated was driven by a rebound in its Tools Group segment, with strong sales and resilient margins despite a year-over-year earnings decline. The company's ability to navigate macro headwinds, including tariffs and high interest rates, was a key positive driver. Additionally, Snap-on's U.S.-centric operations and potential onshoring trends position it to benefit from manufacturing shifts back to the U.S., supporting future growth. The company's flat revenues and organic sales decline were offset by a strong Q2 earnings beat, with diluted EPS of $4.72.

1.c. Company Highlights

2. Snap-on's Q4 Earnings: A Resilient Performance

Snap-on reported a robust fourth-quarter performance, with sales reaching $1.23 billion, up 2.8% from the previous year, driven by a 1.4% organic increase and a favorable foreign currency impact of $15.6 million. Operating income for the quarter was $265.2 million, in line with last year's figure, while the operating income margin was 21.5%, 60 basis points short of last year's level. The company's EPS for the quarter came in at $4.94, beating analyst estimates of $4.86.

Publication Date: Feb -17

📋 Highlights
  • Q4 Sales Growth:: Total sales reached $1.002B, up 2.8% YoY with 1.4% organic growth and $15.6M from favorable foreign currency.
  • OpCo Margin Pressure:: Operating income remained flat at $265.2M, but OI margin declined 60 bps to 21.5% compared to prior year.
  • Financial Services Surge:: OI jumped 115% to $34.4M, driven by strong performance in equipment financing and leasing segments.
  • Tools Group Margin Resilience:: Despite 0.7% organic sales decline, gross margin expanded 150 bps to 46.1% due to product mix and cost controls.
  • Commercial/Industrial Momentum:: C&I group grew 5% to $398.1M, led by Power Tools' double-digit gains and recovery from US government shutdown impacts.

Segment Performance

The commercial and industrial (C&I) group delivered a strong performance, with sales rising 5% to $398.1 million, driven by a 2.8 million organic gain and a favorable foreign currency translation impact of $7.9 million. The Power Dual division led the way with double-digit gains, driven by innovative power solutions. In contrast, the Tools Group saw a decline in sales, but its operating margin improved to 21.2%, up 10 basis points from last year, driven by a shift in product mix and savings from RCI initiatives.

Financial Services and Balance Sheet

Financial services revenue was $108 million, with operating earnings of $74.4 million, up from $66.7 million last year. The company's year-end cash position was $1.006 billion, with more than $900 million available under its credit facilities. Snap-on's balance sheet remains strong, with a net debt to EBITDA ratio of -0.2, indicating a healthy financial position.

Valuation and Outlook

Based on the current price, Snap-on's P/E ratio stands at 19.63, indicating a moderate valuation. The company's ROE is 17.7%, and ROIC is 13.79%, suggesting a strong return on equity and invested capital. Analysts estimate next year's revenue growth at 3.1%, indicating a stable outlook for the company. With a dividend yield of 2.3% and a free cash flow yield of 5.03%, Snap-on appears to be an attractive investment opportunity.

Guidance and Future Prospects

Snap-on expects corporate costs to approximate $28 million, capital expenditures to be around $100 million, and its full-year effective income tax rate to be between 22% and 23% in 2026. The company's guidance suggests a stable outlook, and its commitment to investing in its business and returning value to shareholders is evident. As the company continues to navigate the challenging market conditions, its strong brand and diversified portfolio are likely to drive long-term growth.

3. NewsRoom

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Snap-on: The Long-Term Outlook Seems Decent, But 2026 May Not Be

Feb -20

Source: seekingalpha.com

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ABN Amro Investment Solutions Decreases Stock Holdings in Snap-On Incorporated $SNA

Feb -16

Source: defenseworld.net

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Snap-On Incorporated $SNA Shares Sold by Assetmark Inc.

Feb -14

Source: defenseworld.net

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Snap-on Incorporated Declares Quarterly Dividend

Feb -12

Source: businesswire.com

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Snap-On Q4 Earnings Call Highlights

Feb -07

Source: defenseworld.net

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Envestnet Asset Management Inc. Raises Stock Position in Snap-On Incorporated $SNA

Feb -06

Source: defenseworld.net

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Snap-on Inc (SNA) Q4 2025 Earnings Call Highlights: Strong Financial Services Growth and Dividend Increase Amid Margin Pressures

Feb -05

Source: gurufocus.com

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Snap-on Incorporated (SNA) Q4 2025 Earnings Call Transcript

Feb -05

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.04%)

6. Segments

Snap-on Tools

Expected Growth: 1.2%

Snap-on Tools' 1.2% growth is driven by increasing demand for professional tools and diagnostics, expansion in emerging markets, and a strong brand reputation. Additionally, the company's focus on innovation, digital solutions, and strategic acquisitions contribute to its growth. Furthermore, the rise of electric and autonomous vehicles is driving demand for Snap-on's advanced diagnostic tools, supporting the segment's growth.

Repair Systems and Information

Expected Growth: 0.8%

Snap-on's Repair Systems and Information segment growth is driven by increasing demand for diagnostic and repair solutions, expansion in emerging markets, and strategic acquisitions. Additionally, the rise of electric and autonomous vehicles is fueling growth in advanced diagnostic tools and software. Furthermore, the company's digital platform and subscription-based services are contributing to recurring revenue streams.

Commercial and Industrial

Expected Growth: 1.5%

The 1.5% growth in Commercial and Industrial segment of Snap-on Incorporated is driven by increasing demand for diagnostic and repair information, rising adoption of electric and autonomous vehicles, and growing need for tool storage and management solutions. Additionally, expansion in emerging markets and strategic acquisitions are contributing to the segment's growth.

Intersegment Eliminations

Expected Growth: 0.0%

Intersegment Eliminations from Snap-on Incorporated shows 0.0% growth, driven by the absence of significant transactions between segments, indicating a lack of intercompany sales or purchases. This suggests a well-structured business model with minimal internal dependencies, allowing for efficient resource allocation and a focus on external market opportunities.

Financial Services

Expected Growth: 1.1%

Snap-on Incorporated's 1.1% growth in Financial Services is driven by increasing demand for vehicle diagnostics and repair information, expansion of its credit offerings, and strategic partnerships with OEMs and dealerships. Additionally, the company's digital platform enhancements and growing presence in emerging markets contribute to its steady growth.

7. Detailed Products

Diagnostic Tools

A range of diagnostic tools and equipment for vehicle repair and maintenance, including scan tools, multimeters, and oscilloscopes.

Tool Storage

A variety of tool storage solutions, including tool chests, cabinets, and carts, designed to organize and protect tools and equipment.

Hand Tools

A comprehensive range of hand tools, including wrenches, pliers, screwdrivers, and hammers, designed for professional technicians and serious DIYers.

Equipment

A range of equipment solutions, including lifts, wheel balancers, and tire changers, designed to support vehicle repair and maintenance.

Information and Software Solutions

A range of information and software solutions, including repair information, estimating, and shop management software, designed to support vehicle repair and maintenance.

Shop and Tech Equipment

A range of shop and tech equipment solutions, including air compressors, generators, and lighting, designed to support vehicle repair and maintenance.

8. Snap-on Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

Snap-on Incorporated has a diverse product portfolio, which reduces the threat of substitutes. The company's products are highly specialized and are designed to meet specific needs, making it difficult for substitutes to emerge.

Bargaining Power Of Customers

Snap-on Incorporated has a large customer base, which gives customers some bargaining power. However, the company's strong brand reputation and high-quality products reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Snap-on Incorporated has a diversified supplier base, which reduces the bargaining power of suppliers. The company's large scale of operations also gives it negotiating power over suppliers.

Threat Of New Entrants

The tool and equipment industry has high barriers to entry, including high capital requirements and the need for specialized expertise. This reduces the threat of new entrants.

Intensity Of Rivalry

The tool and equipment industry is highly competitive, with several established players competing for market share. Snap-on Incorporated faces intense competition from companies such as Matco Tools and Mac Tools.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 19.46%
Debt Cost 5.16%
Equity Weight 80.54%
Equity Cost 8.92%
WACC 8.19%
Leverage 24.17%

11. Quality Control: Snap-on Incorporated passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Snap-on

A-Score: 6.3/10

Value: 4.3

Growth: 6.0

Quality: 8.2

Yield: 6.0

Momentum: 4.5

Volatility: 9.0

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Timken

A-Score: 5.5/10

Value: 5.8

Growth: 5.0

Quality: 5.2

Yield: 4.0

Momentum: 6.0

Volatility: 7.0

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RBC Bearings

A-Score: 5.3/10

Value: 0.9

Growth: 7.3

Quality: 6.6

Yield: 0.0

Momentum: 8.5

Volatility: 8.7

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Lincoln Electric

A-Score: 5.3/10

Value: 2.2

Growth: 6.4

Quality: 6.6

Yield: 2.0

Momentum: 7.0

Volatility: 7.7

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Toro

A-Score: 4.8/10

Value: 3.9

Growth: 5.4

Quality: 6.0

Yield: 3.0

Momentum: 3.0

Volatility: 7.7

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Stanley Black & Decker

A-Score: 4.5/10

Value: 5.1

Growth: 3.1

Quality: 4.2

Yield: 7.0

Momentum: 2.5

Volatility: 5.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

382.23$

Current Price

382.23$

Potential

-0.00%

Expected Cash-Flows