The industrial sector has been performing well despite recent market slumps, with companies like Stanley Black & Decker, Eaton, and Honeywell International receiving positive feedback from Wall Street analysts. Barclays upgraded Eaton to a hold-equivalent rating, citing future sales growth opportunities due to the generative artificial intelligence boom. The analysts also raised their full-year 2024 earnings-per-share estimates for Eaton. The Club views Eaton as a strong investment due to its potential benefits from the AI wave and increased demand for electricity as data centers expand. We have set a buy-equivalent 1 rating and increased our price target on Eaton to $330 per share.
Stanley Black & Decker also received positive feedback, with analysts raising its price target and reiterating an overweight rating. Barclays believes the worst is behind Stanley Black & Decker’s tools business and expects inventory reduction and balance sheet leverage to improve in the future. The Club shares a similar outlook on the company and believes it may benefit from potential Federal Reserve rate cuts in 2024. Our price target for Stanley Black & Decker is $110 per share, and we maintain a buy-equivalent 1 rating.
Honeywell International’s price target was increased slightly, with analysts expecting buybacks to accelerate and the company to deploy more capital towards mergers and acquisitions. The Club also sees potential in Honeywell, although our price target remains at $230 per share. CEO Vimal Kapur is expected to make significant changes to Honeywell’s business portfolio, including a possible sale of the personal protective equipment division, which could be worth more than $2 billion. Jim Cramer’s Charitable Trust holds positions in Eaton, Stanley Black & Decker, and Honeywell International.
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