Stanley Black & Decker shares rose 13.1% on 2026-11-04, closing at $118.36 from a previous close of $104.62. The company's third-quarter results showed adjusted earnings of $2.31 a share, well above the $1.56 analysts had expected, and management lifted its outlook for the rest of the year.
The move was 5.7x the stock's typical daily swing over the past year of 2.3%, and the biggest gain in this direction since 12 May 2025. The S&P 500 rose 1.8% the same session, while the median move among covered industrial machinery and supplies peers fell 0.7%, which points to a reaction tied to Stanley Black & Decker's own results rather than a broader rally.
A tariff refund widened the earnings beat
Net sales of $3.7 billion were down 1% from a year earlier on a total basis but up 4% organically, the company said, as higher volume of 6% was offset by pricing down 2% and portfolio changes down 4%. Gross margin reached 39.0%, up 760 basis points, a gain the release attributed in part to a roughly 430-basis-point benefit from net tariff refunds. GAAP earnings per share were $1.83; adjusted EPS of $2.31 included about $0.67 of benefit from the same refunds. Net earnings were 7.3% of sales, up 590 basis points year over year.
Guidance raised, and a new $1 billion buyback
The company raised its 2026 adjusted EPS guidance to a range of $5.95 to $6.25, from $5.20 to $5.80, and lifted free cash flow guidance to $1.0 billion to $1.2 billion, from $600 million to $800 million. It linked the revision to the tariff refund realised year-to-date and to projected taxes and fees tied to the CAM divestiture. Stanley Black & Decker also said it repurchased about $250 million of shares in the quarter, fully using an earlier $500 million authorisation, and that its board approved a new $1 billion repurchase authorisation on October 29.
Engineered Fastening stayed weak
Not every part of the business improved. Engineered Fastening sales fell 21% year over year, mostly reflecting the CAM divestiture, and segment margin slipped 20 basis points to 11.7% as automotive demand came in below expectations. Tools & Outdoor, the larger segment, fared better: sales rose 2% and segment margin expanded 520 basis points to 17.0%, though management said roughly 430 basis points of that gain came from tariff refunds rather than underlying operating improvement. The next quarterly report will show whether organic growth in Tools & Outdoor and the margin gains hold once this refund benefit fades, and whether the automotive softness in Engineered Fastening persists.
What the guidance raise means for Fundamentalytics' model
Our discounted cash flow model treats free cash flow margin as one of its more sensitive inputs. On a trailing-12-month basis, Stanley Black & Decker's free cash flow margin was up 5.7 percentage points year over year; if that improvement held at its current level, our model's base case would show a value change of 167.2%. Because the company's own release attributes much of the recent margin gain to a tariff refund rather than a structural change, that persistence is not established: each 1 percentage point of lower free cash flow margin would cut model value by −10.9%. These are model values under stated assumptions, not a comparison with the share price.