Friday’s Top Upgrades (and Downgrades): Angie’s List Inc (ANGI) and More

In fact, Stanley Black & Decker got its earnings news out of the way nearly a month ago (and the news was pretty good — a $0.09 earnings beat in the fourth quarter, even if the fiscal 2013 forecast was a bit light). Today, Swiss megabanker UBS is giving Stanley a pass on the weak guidance, and a boost to its share price by hiking its price target to $85.

And this time, I’m going to go out on a limb and say the analyst is totally wrong to do so. Priced at nearly 15 times earnings, Stanley’s not growing any faster than Zebra — just 8% a year projected over the next five years. In its defense , Stanley does pay a nice dividend yield of 2.5%. But with free cash flow still lagging reported net income badly, at $580 million cash profit versus $884 million in reported GAAP income, I still can’t endorse the stock. Twenty-two times free cash is simply too much to pay for an 8% grower, and as for UBS’ prediction that Stanley will hit $85 within a year? Dream on.

Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Friday’s Top Upgrades (and Downgrades) originally appeared on Fool.com and is written by Rich Smith.

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