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Yahoo
16-05-2025
- Business
- Yahoo
Here's Why Shares in Stanley Black & Decker Soared This Week
An improving trading relationship between the U.S. and China is good news for Stanley Black & Decker. Investors can pencil in better earnings and cash-flow outcomes than management gave recently, provided the tariffs don't go back up. 10 stocks we like better than Stanley Black & Decker › Stanley Black & Decker (NYSE: SWK) stock rose by 12.8% in the week to Friday morning. The move comes as a thawing in the U.S./China trading relationship encouraged investors to price in a better outcome for the toolmaker's earnings in 2025 and beyond. The U.S. and China said they would suspend the incremental tariffs imposed on each other's goods, which were announced in early April for an initial period of 90 days. In addition, the parties will "establish a mechanism to continue discussions about economic and trade relations." Due to its exposure to China-sourced products, the company is a bellwether for U.S./China trading relations. Its total adjusted cost of sales for the U.S. by country of origin is about $6.8 billion, with $0.9 billion to $1 billion directly from China, $1.5 billion to $1.6 billion from the rest of the world (also impacted by tariffs), and $1.2 billion to $1.3 billion from Mexico, two-thirds of which is non-USMCA compliant. The cost exposure is sufficient for management to lower its full-year planning assumptions after the announcement of incremental tariffs (now paused for the U.S./China) in April: The post-April guidance calls for base case adjusted full-year earnings per share (EPS) of $3.30 compared to the previous guidance of $4.05. The post-April guidance calls for base case full-year free cash flow (FCF) of $500 million compared to the previous guidance of $750 million. Given the pause in incremental tariffs and the possibility of a further de-escalation in the conflict, investors are now pencilling in figures for full-year EPS and FCF somewhere between the initial and post-April tariff guidance outlined above. That's why the stock rose this week. Before you buy stock in Stanley Black & Decker, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Stanley Black & Decker wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $635,275!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $826,385!* Now, it's worth noting Stock Advisor's total average return is 967% — a market-crushing outperformance compared to 171% for the S&P 500. Don't miss out on the latest top 10 list, available when you join . See the 10 stocks » *Stock Advisor returns as of May 12, 2025 Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. Here's Why Shares in Stanley Black & Decker Soared This Week was originally published by The Motley Fool
Yahoo
15-05-2025
- Business
- Yahoo
HAYW Q1 Earnings Call: Tariff Mitigation and Aftermarket Strength Drive Outperformance
Pool equipment and automation systems manufacturer Hayward Holdings (NYSE:HAYW) reported Q1 CY2025 results topping the market's revenue expectations , with sales up 7.7% year on year to $228.8 million. The company expects the full year's revenue to be around $1.08 billion, close to analysts' estimates. Its non-GAAP profit of $0.10 per share was 17% above analysts' consensus estimates. Is now the time to buy HAYW? Find out in our full research report (it's free). Revenue: $228.8 million vs analyst estimates of $213.7 million (7.7% year-on-year growth, 7.1% beat) Adjusted EPS: $0.10 vs analyst estimates of $0.09 (17% beat) Adjusted EBITDA: $49.1 million vs analyst estimates of $42.7 million (21.5% margin, 15% beat) The company reconfirmed its revenue guidance for the full year of $1.08 billion at the midpoint EBITDA guidance for the full year is $285 million at the midpoint, in line with analyst expectations Operating Margin: 14.6%, in line with the same quarter last year Free Cash Flow was -$11.37 million compared to -$83.14 million in the same quarter last year Organic Revenue rose 5.9% year on year (1.1% in the same quarter last year) Market Capitalization: $3.13 billion Hayward's first quarter results were shaped by volume and price gains across both its North America and international segments, with management highlighting resilience in the aftermarket business and effective execution on margin expansion initiatives. CEO Kevin Holleran emphasized the 'robust sales growth and profitability,' attributing these results to strong demand in key product categories like pumps, lighting, and automation, as well as continued integration benefits from the ChlorKing acquisition. He also noted that inventory levels are now well aligned with channel demand, following earlier efforts to recalibrate distribution. Looking ahead, management reiterated its full-year outlook, despite ongoing macroeconomic uncertainty and increased tariffs on China-sourced products. Holleran detailed a four-pronged mitigation plan—structural sourcing alternatives, pricing actions, supplier negotiations, and inventory management—to offset the estimated $85 million annualized impact of new tariffs. CFO Eifion Jones added that out-of-cycle price increases and accelerated cost-reduction initiatives are expected to protect margins, while new product introductions like OmniX are positioned to support future growth even as discretionary spending remains pressured. Hayward's management attributed first quarter outperformance to a combination of operational execution, targeted product innovation, and effective tariff mitigation. The company's ability to maintain profitability amid external pressures was a focus of the call. Aftermarket demand resilience: Management reported that over 80% of sales serve the aftermarket, which remains stable as most pool owners see equipment maintenance as non-discretionary. Discretionary categories, such as new pool construction and remodels, showed signs of deferral rather than outright demand loss. OmniX platform launch: The introduction of the OmniX wireless automation platform was described as a breakthrough for automating millions of existing pools. Holleran explained that OmniX 'provides a far more cost-effective, simpler path to automation,' enabling homeowners to add IoT controls one product at a time during natural equipment replacement cycles. Tariff mitigation actions: Facing new 145% tariffs on certain China-sourced products, Hayward accelerated plans to reduce direct China sourcing from 10% to 3% of cost of goods sold by year-end. The strategy includes shifting manufacturing volume to U.S. plants, renegotiating supplier contracts, and implementing broad-based price increases. Channel inventory management: The company worked closely with distributors to limit preorders ahead of price hikes and keep inventory levels appropriate for the season. Management indicated the destocking phase is complete, and inventories are in balance with demand. Margin and cost control focus: Hayward continued to drive margin expansion through SKU rationalization, bill of materials optimization, and automation investments at U.S. facilities. CFO Jones noted sequential margin improvement in international operations and emphasized cost discipline as a key lever for offsetting tariff-related headwinds. Management's outlook for 2025 centers on offsetting tariff pressures through pricing, cost initiatives, and adoption of new technology, while acknowledging ongoing uncertainty in discretionary pool spending. Pricing and cost mitigation: The company expects out-of-cycle price increases and accelerated supply chain adjustments to help absorb higher input costs from tariffs. Management believes these actions, combined with cost-cutting programs, should support stable margins. OmniX adoption and aftermarket focus: Broader deployment of the new OmniX platform is viewed as a major opportunity to expand automation in the large installed base of existing pools, which could drive incremental aftermarket sales even if new construction remains subdued. Macroeconomic and housing risks: Management cautioned that persistent weakness in new home sales and higher interest rates may continue to pressure discretionary pool upgrades and new builds, with the timing of a recovery remaining uncertain. Andrew Carter (Stifel): Asked about the cost and margin impacts of shifting production out of China to mitigate tariffs; management outlined a four-pronged strategy and confirmed that most of the impact will be offset by year-end. Saree Boroditsky (Jefferies): Questioned the risk of demand destruction from recent price increases; CEO Holleran stated that observed demand changes appear to be deferred rather than lost, with little evidence of customers trading down significantly. David Tarantino (KeyBanc): Requested feedback on early-season consumer trends and the impact of new pricing actions; management noted a slow start in January but a strong March as weather improved, and reaffirmed full-year guidance. Sean Colman (BofA Merrill Lynch): Inquired about volume assumptions in guidance and the potential for trade-down; management clarified that guidance assumes pressure on discretionary categories but resilience in critical aftermarket demand. Nick Cash (Goldman Sachs): Asked about the impact of increased U.S. manufacturing utilization on margins; management pointed to available capacity and plans to leverage automation for further cost benefits. In the coming quarters, the StockStory team will be monitoring (1) tangible progress in shifting production from China to U.S. facilities as a measure of tariff mitigation, (2) adoption rates and customer feedback for the OmniX automation platform as an indicator of aftermarket growth, and (3) trends in discretionary pool construction and remodel activity as the broader housing market evolves. Progress on these fronts will help clarify Hayward's ability to sustain revenue growth and margin stability in a volatile environment. Hayward currently trades at a forward P/E ratio of 19×. Should you double down or take your chips? Find out in our free research report. Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Asia Times
13-05-2025
- Business
- Asia Times
More turbulence lies ahead in the trade wars
Defying expectations, the United States and China have announced an important agreement to de-escalate bilateral trade tensions after talks in Geneva, Switzerland. Here are the good, the bad and the ugly: The good news is their recent tariff increases will be slashed. The US has cut tariffs on Chinese imports from 145% to 30%, while China has reduced levies on US imports from 125% to 10%. This greatly eases major bilateral trade tensions, and explains why financial markets rallied. The bad news is twofold. First, the remaining tariffs are still high by modern standards. The US average trade-weighted tariff rate was 2.2% on January 1 2025, while it is now estimated to be up to 17.8%. This makes it the highest tariff wall since the 1930s. Overall, it is very likely a new baseline has been set. Bilateral tariff-free trade belongs to a bygone era. Second, these tariff reductions will be in place for 90 days, while negotiations continue. Talks will likely include a long list of difficult-to-resolve issues. China's currency management policy and industrial subsidies system dominated by state-owned enterprises will be on the table. So will the many non-tariff barriers Beijing can turn on and off like a tap. China is offering to purchase unspecified quantities of US goods – in a repeat of a US-China 'phase 1 deal' from Trump's first presidency that was not implemented. On his first day in office in January, amid a blizzard of executive orders, Trump ordered a review of that deal's implementation. The review found China didn't follow through on the agriculture, finance and intellectual property protection commitments it had made. Unless the US has now decided to capitulate to Beijing's retaliatory actions, it is difficult to see the US being duped again. Failure to agree on these points would reveal the ugly truth that both countries continue to impose bilateral export controls on goods deemed sensitive, such as semiconductors (from the US to China) and processed critical minerals (from China to the US). Moreover, in its so-called 'reciprocal' negotiations with other countries, the US is pressing trading partners to cut certain sensitive China-sourced goods from their exports destined for US markets. China is deeply unhappy about these US demands and has threatened to retaliate against trading partners that adopt them. Overall, the announcement is best viewed as a truce that does not shift the underlying structural reality that the US and China are locked into a long-term cycle of escalating strategic competition. That cycle will have its ups (the latest announcement) and downs (the tariff wars that preceded it). For now, both sides have agreed to announce victory and focus on other matters. For the US, this means ensuring there will be consumer goods on the shelves in time for Halloween and Christmas, albeit at inflated prices. For China, it means restoring some export market access to take pressure off its increasingly ailing economy. As neither side can vanquish the other, the likely long-term result is a frozen conflict. This will be punctuated by attempts to achieve 'escalation dominance,' as that will determine who emerges with better terms. Observers' opinions on where the balance currently lies are divided. Along the way, and to use a quote widely attributed to Winston Churchill, to 'jaw-jaw is better than to war-war.' Fasten your seatbelts, there is more turbulence to come. Significantly, the US has not (so far) changed its basic goals for all its bilateral trade deals. Its overarching aim is to cut the goods trade deficit by reducing goods imports and eliminating non-tariff barriers it says are 'unfairly' prohibiting US exports. The US also wants to remove barriers to digital trade and investments by tech giants and 'derisk' certain imports that it deems sensitive for national security reasons. The agreement between the US and UK last week clearly reflects these goals in operation. While the UK received some concessions, the remaining tariffs are higher, at 10% overall, than on April 2 and subject to US-imposed import quotas. Furthermore, the UK must open its market for certain goods while removing China-originating content from steel and pharmaceutical products destined for the US. For Washington's Pacific defense treaty allies, including Australia, nothing has changed. Potentially difficult negotiations with the Trump administration lie ahead, particularly if the US decides to use our security dependencies as leverage to wring concessions in trade. Japan has already disavowed linking security and trade, and progress there should be closely watched. The US has previously paused high tariffs on manufacturing nations in South-East Asia, particularly those used by other nations as export platforms to avoid China tariffs. Vietnam, Cambodia and others will face sustained uncertainty and increasingly difficult balancing acts. The economic stakes are higher for them. They, like the Japanese, are long-practiced in the subtle arts of balancing the two giants. Still, juggling ties with both Washington and Beijing will become the act of a higher-and-higher-wire trapeze artist. Peter Draper is a professor and the executive director of the Institute for International Trade, and the Jean Monnet chair of trade and environment at the University of Adelaide. Nathan Howard Gray is a senior research fellow of the Institute for International Trade, University of Adelaide. This article is republished from The Conversation under a Creative Commons license. Read the original article.
RTÉ News
13-05-2025
- Business
- RTÉ News
What does US-China tariffs' truce mean for ongoing trade war?
By , University of Adelaide and Nathan Howard Gray, University of Adelaide Defying expectations, the United States and China have announced an important agreement to de-escalate bilateral trade tensions after talks in Geneva. The good news is their recent tariff increases will be slashed. The US has cut tariffs on Chinese imports from 145% to 30%, while China has reduced levies on US imports from 125% to 10%. This greatly eases major bilateral trade tensions, and explains why financial markets rallied. From RTÉ Radio 1's Today with Claire Byrne, Richard Curran from The Business on US and China agreement to slash tariffs The bad news is twofold. First, the remaining tariffs are still high by modern standards. The US average trade-weighted tariff rate was 2.2% on January 1 2025, while it is now estimated to be up to 17.8%. This makes it the highest tariff wall since the 1930s. Overall, it is very likely a new baseline has been set. Bilateral tariff-free trade belongs to a bygone era. Second, these tariff reductions will be in place for 90 days, while negotiations continue. Talks will likely include a long list of difficult-to-resolve issues. China's currency management policy and industrial subsidies system dominated by state-owned enterprises will be on the table. So will the many non-tariff barriers Beijing can turn on and off like a tap. China is offering to purchase unspecified quantities of US goods – in a repeat of a US-China "Phase 1 deal" from Trump's first presidency that was not implemented. On his first day in office in January, amid a blizzard of executive orders, Trump ordered a review of that deal's implementation. The review found China didn't follow through on the agriculture, finance and intellectual property protection commitments it had made. Unless the US has now decided to capitulate to Beijing's retaliatory actions, it is difficult to see the US being duped again. Failure to agree on these points would reveal the ugly truth that both countries continue to impose bilateral export controls on goods deemed sensitive, such as semiconductors (from the US to China) and processed critical minerals (from China to the US). Moreover, in its so-called "reciprocal" negotiations with other countries, the US is pressing trading partners to cut certain sensitive China-sourced goods from their exports destined for US markets. China is deeply unhappy about these US demands and has threatened to retaliate against trading partners that adopt them. A temporary truce Overall, the announcement is best viewed as a truce that does not shift the underlying structural reality that the US and China are locked into a long-term cycle of escalating strategic competition. That cycle will have its ups (the latest announcement) and downs (the tariff wars that preceded it). For now, both sides have agreed to announce victory and focus on other matters. For the US, this means ensuring there will be consumer goods on the shelves in time for Halloween and Christmas, albeit at inflated prices. For China, it means restoring some export market access to take pressure off its increasingly ailing economy. From RTÉ Radio 1's Brendan O'Connor Show, "the Chinese public wonder has America gone mad". Irish Times China correspondent Denis Staunton on Chinese reaction to the trade war with the US As neither side can vanquish the other, the likely long-term result is a frozen conflict. This will be punctuated by attempts to achieve "escalation dominance", as that will determine who emerges with better terms. Observers' opinions on where the balance currently lies are divided. Along the way, and to use a quote widely attributed to Winston Churchill, to "jaw-jaw is better than to war-war". Fasten your seat belts, there is more turbulence to come. Where does this leave everyone else? Significantly, the US has not (so far) changed its basic goals for all its bilateral trade deals. Its overarching aim is to cut the goods trade deficit by reducing goods imports and eliminating non-tariff barriers it says are "unfairly" prohibiting US exports. The US also wants to remove barriers to digital trade and investments by tech giants and "derisk" certain imports that it deems sensitive for national security reasons. The agreement between the US and UK last week clearly reflects these goals in operation. While the UK received some concessions, the remaining tariffs are higher, at 10% overall, than on April 2 and subject to US-imposed import quotas. Furthermore, the UK must open its market for certain goods while removing China-originating content from steel and pharmaceutical products destined for the US. As neither side can vanquish the other, the likely long-term result is a frozen conflict. For Washington's Pacific defence treaty allies, including Australia, nothing has changed. Potentially difficult negotiations with the Trump administration lie ahead, particularly if the US decides to use our security dependencies as leverage to wring concessions in trade. Japan has already disavowed linking security and trade, and their progress should be closely watched. The US has previously paused high tariffs on manufacturing nations in South-East Asia, particularly those used by other nations as export platforms to avoid China tariffs. Vietnam, Cambodia and others will face sustained uncertainty and increasingly difficult balancing acts. The economic stakes are higher for them. They, like the Japanese, are long-practised in the subtle arts of balancing the two giants. Still, juggling ties with both Washington and Beijing will become the act of an increasingly high-wire trapeze artist.
Yahoo
12-05-2025
- Business
- Yahoo
Fed rate cut bets hammered by U.S.-China tariff truce
The Federal Reserve might have found the time it needs to determine the impact of President Donald Trump's tariff strategies on the world's biggest economy, following a pause in reciprocal levies between the U.S. and China that could settle global trade tensions. Traders are now betting that the Fed won't lower its benchmark lending rate, pegged at 4.375%, until at least September after the weekend agreement between Washington and Beijing cut tariffs on China-made goods to around 30% and levies on U.S. exports to 10%. 💸💰Don't miss the move: Subscribe to TheStreet's free daily newsletter 💰💸 The two sides also pledged to keep the lowered tariff rates in place for at least 90 days, while establishing a "a mechanism to continue discussions about economic and trade relations.' The surprise agreement, reached late Sunday following a series of marathon talks in Switzerland led by Treasury Secretary Scott Bessent, opens up around $600 billion in two-way trade between the world's two biggest economies and likely eliminates the risk of a U.S. recession between now and year's end. The Atlanta Fed's GDPNow tool, which tracks real-time U.S. growth, pegs the economy's second-quarter advance at 2.3%, while the Commerce Department later this month will update its official reading for the first quarter, which it estimated at negative 0.3%. Fed Chairman Jerome Powell warned last week that "if the large increases in tariffs that have been announced are sustained, they are likely to generate a rise in inflation, a slowdown in economic growth, and an increase in unemployment," as he hinted at stagflation risks and held the central bank's key lending rate in place for a third consecutive meeting."Ultimately we think our policy rate is in a good place to stay as we await further clarity on tariffs and ultimately our implications for the economy," Powell said. The CME Group's FedWatch has now pushed back the odds of a Fed rate cut until September, while lowering the chances of a quarter-point reduction in June, when the Fed will publish new growth and inflation forecasts. The chances of a June rate cut are now just 8.1%, down from a high as 64.4% this time last month. Traders are also paring their overall outlook for 2025 rate cuts from three to two, pegging the Federal Funds Rate at between 3.75% and 4% by the end of the year."We may have to wait for the May economic data cycle at minimum and possibly also the June data to get a better read on the US economic trajectory," said John Hardy, global head of macroeconomic strategy at Saxo Bank. Inflation pressures could continue to be stoked by the current tariff schedules, however, particularly now that the unwinding of levies between the U.S. and China will likely stimulate near-term growth prospects. China-sourced goods will carry a 30% tariff, which will be paid by U.S. importers and likely passed on to consumers in the form of price hikes, while duties tied to non-compliant goods within the USCMA agreement will impose an extra 25% cost on imports from Canada and Mexico. The higher rate expectations, as well as the likely impact from faster inflation, is powering the U.S. dollar firmly higher in early Monday trading, with the greenback last seen 1.22% higher against a basket of its global peers. Benchmark 10-year Treasury note yields, meanwhile, jumped 8 basis points from Friday to trade at 4.463%, with rate-sensitive 2-year notes rising 12 basis points to 4.002%. More Economic Analysis: Fed inflation gauge sets up stagflation risks as tariff policies bite U.S. recession risk leaps as GDP shrinks Like it or not, the bond market rules all Those moves could accelerate if Tuesday's Consumer Price Index inflation report for April, the first of a series of readings that will include the impact of what Trump called his Liberation Day levies, unveiled April 2. Economists expect headline pressures held at an annual rate of 2.4% but likely jumped 0.3% from March levels, with the core reading and increase forecast at 2.8% and 0.3% respectively. "US CPI numbers are expected to come in quite hot on Tuesday, keeping US rates supported," said ING's global head of markets, Chris Turner. "The rest of the data calendar is relatively empty, which means positive headlines can remain the main driver of global rates," he added. "Until told otherwise by data or headlines, the upward pressure on rates can hold for now." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
