Goldman Sachs’ Stocks With Highest Consensus Returns: 42 Stocks With The Highest Consensus ROE

2. Stanley Black & Decker, Inc. (NYSE:SWK)

Consensus ROE: 48%

Number of Hedge Fund Investors in Q2 2024: 24

Stanley Black & Decker, Inc. (NYSE:SWK) is one of the largest tools and engineered products companies in the world. The firm has a global operations base, which enabled it to generate $15.6 over its four latest quarters and post a sizeable inventory of $4.6 billion. Since high rates depress activity that creates demand for tools, Stanley Black & Decker, Inc. (NYSE:SWK)’s stock struggled between January and late July as it lost 12%. However, the firm’s fiscal Q2 earnings saw it beat analyst revenue and EPS estimates of $4.016 billion and $0.84 by posting $4.024 billion and $1.09 in the segments. This led to the stock soaring by 11%, and since the second quarter earnings, the shares are up by 12%. The quarter also saw Stanley Black & Decker, Inc. (NYSE:SWK) address another investor concern of high debt as the firm reduced its debt by $1.2 billion. A recovery in consumer spending coupled with greater industrial activity should help the firm, and these will be key for Stanley Black & Decker, Inc. (NYSE:SWK)’s margins, which are another factor that drives its hypothesis.

Stanley Black & Decker, Inc. (NYSE:SWK)’s management commented on its margin control strategies during the Q2 2024 earnings call:

“Our global cost reduction program remains on track for expected run rate savings of $1.5 billion by the end of 2024 and $2 billion by the end of 2025. Our teams continue to accelerate savings actions, which have successfully delivered $1.3 billion of run rate savings program to-date. These results reinforce our confidence in achieving our 35% plus adjusted gross margin goal. I am confident that by executing on our transform strategy, we are positioning the company to deliver higher levels of sustainable organic revenue growth, profitability and cash flow, which will drive strong long-term shareholder returns.”