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Snap-on Inc SNA

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Snap-on Reports Strong Results to End the First Half of 2021; End Markets Continued to Show Gains

Dawit Woldemariam Equity Analyst

Analyst Note

| Dawit Woldemariam |

Snap-on posted strong second-quarter results, showing large gains in both revenue (up 49% year over year) and operating income (up 138% year over year). Most of the uplift was due to an easier comparison with the same quarter a year ago, due to the pandemic. Comparing to prepandemic levels (second quarter of 2019), Snap-on posted 14% year-over-year revenue growth. In addition, the company’s tools and repair systems businesses grew 19% and 14% year over year (versus prepandemic levels), respectively. We now expect revenue to increase 14% year over year in 2021 versus our previous estimate of 11%. As a result, our fair value estimate increased to $168 from $164.

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Company Profile

Business Description

Snap-on is a manufacturer of premium tools and software for professional technicians. Hand tools are sold through franchisee-operated mobile vans that serve auto technicians who purchase tools at their own expense. A unique element of its business model is that franchisees bear significant risk, as they must invest in the mobile van, inventory, and software. At the same time, franchisees extend personal credit directly to technicians on an individual tool basis. Snap-on currently operates three segments—repair systems and information, commercial and industrial, and tools. The company’s finance arm provides financing to franchisees to run their operations, which includes offering loans and leases for mobile vans.

2801 80th Street
Kenosha, WI, 53143
T +1 262 656-5200
Sector Industrials
Industry Tools & Accessories
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 12,300