Stanley Black & Decker Target Raised to $78 by Goldman Sachs Amid Margin Gains

The recent Goldman Sachs note downgrading—or rather modestly raising—its price target on Stanley Black & Decker (SWK) to $78 from $76 while retaining a Neutral rating suggests the firm views the stock as fairly valued at current levels with limited near-term upside. This implies that Goldman expects incremental improvements, but not enough to meaningfully change its rating until clearer evidence of growth revival or margin expansion emerges. [1] Meanwhile, other analysts such as UBS, Wells Fargo, Robert W. Baird and Barclays hold higher price targets (some near $90 or above), often with Buy or Overweight ratings. This gap indicates greater optimism among peers versus Goldman’s more conservative risk/reward estimate. [5][6][7]

Underlying SWK’s operational profile shows mixed trends. In Q3 2025, adjusted gross margin rose to approximately 31.6%, up ~110 basis points year-over-year, aided by supply chain improvements and pricing discipline. However, revenue growth was flat, dragged by volume declines especially in industrial and automotive segments, partially offset by favorable pricing and currency effects. Tariff disruptions are material: the company estimates ~$800 million gross impact for 2025, and approximately a $0.65 EPS headwind after mitigation via pricing, supply chain shifts, and operational changes. [2][4]

Strategically, management is pressing toward a long-term adjusted gross margin target of 35%+, alongside free cash flow generation (guidance around $600 million in 2025), debt reduction and stronger earnings power. [2][3] But external risks remain prominent: demand in DIY/home/outdoor segments is subdued, tariffs remain an uncertain drag, industrial end-markets (especially automotive) are soft, and margin improvements hinge on cost actions and operational execution. The timeframe for margin recovery (Goldman’s target of ~35% gross) may stretch into or beyond 2026 depending on macro trends.

From a valuation standpoint, with SWK trading in the low-to-mid-$70s and many analysts’ targets in the $80-90 range, there is potential upside if risks are managed and positive catalysts emerge. Goldman’s revised target reflects its view that such catalysts are uncertain or incremental for now. Investors will likely be watching adoption of cost savings actions, the impact of tariff mitigation, and whether volume declines stabilize or reverse.