S&P cuts Stanley Black & Decker

S&P said it lowered all its Stanley Black & Decker Inc. ratings, including the issuer rating to A- from A.

“We expect persistent inflationary pressures and core business challenges will cause leverage to remain above 5x this year before operational improvements take hold, margins improve, and leverage begins to decrease. Stanley's recently reported second-quarter results were significantly below our expectations, with management citing persistent inflationary price pressures and lower volumes. We now estimate adjusted net debt leverage to remain above 5x in 2023, compared with our previous expectation for 3x leverage, before decreasing to 3–3.5x in 2024,” the agency said in a statement.

S&P said it forecasts the company’s free cash flow to be $775 million-$875 million in 2023 and about $1 billion in 2024.

The outlook is negative.

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