Snap-on Incorporated: Snap It Up Quick, New Highs Will Come Soon

Key Points

• Snap-on Incorporated is well-positioned to grow and sustain solid margins in the coming years.
• The stock trades at a premium to historical norms but still offers value, given its capital returns and growth outlook.
• Technical and analyst trends suggest this stock could hit record levels, potentially before the year's end.

Snap-on Incorporated NYSE: SNA stock trades near the high end of its historical range in 2025, but it can go higher because this premium is well deserved. The high-quality industrial business is well-supported by global demand, generates ample cash flow, and pays a healthy capital return, including dividends, distribution growth, a market-beating yield, and share-reducing buybacks. 

Regarding the value, trading at 17x its current year outlook may be highly valued relative to its historical norms, but let's be fair. This is well below the S&P 500 average; the yield is more than double; the payout is reliable; and the earnings growth outlook is verging on robust.

Assuming the analysts are right—and it's likely the forecasts are too cautious (as has historically been the case)—this stock is trading at approximately 10x its 2030 consensus forecast, suggesting a deep value and that its price could increase by 50% to 70% within a few years. 

Snap-On Outperforms in Q3, Provides Optimistic Outlook 

Snap-on had a solid quarter in Q3 with revenue growing by 3% organically, an FX tailwind emerging, and margins strong. The 3.5% top-line gain is slightly better than expected, driven by strength in the Repair segment, which grew by 8.9%. Strength was also seen in the core Snap-on Tools Group, which grew organically by 1%, offset by a slight decline in the Commercial & Industrial and Financial Services segments.

Regarding end markets, the company says it is seeing demand from both inside and outside garage settings.

The margin news is also solid. The company widened its margins at the gross and operating levels, assisted by foreign exchange translation, leaving operating income and earnings above forecasts. The core operating margin improved by 140 basis points, that’s without the impact of Financial Services, while the net widened by a smaller 90 bps.

The takeaway is that adjusted earnings outperformed by a nickel, in alignment with the topline strength, sufficient to sustain and improve the capital return outlook. 

Snap-on did not provide specific guidance in its report but did offer optimistic commentary. Management says it is well-positioned to sustain its growth, sees numerous opportunities to capitalize on, and is accelerating its capex in Q4 as a result.

The goal is to expand the customer base, move into new verticals, and deepen penetration of critical industries.

Snap-on’s Capital Return Drives This Uptrend

Snap-on’s growth trajectory is critical to the stock price outlook, but ultimately, the impact of that growth on cash flow and capital returns drives the market.

This company is a high-yielding stock, paying an annualized distribution of 2.6% as of mid-October.

The payout is reliable, as it is less than 50% of the yearly earnings forecast, and the balance sheet is a fortress. 

Investors may also expect dividend increases in upcoming years. Snap-on has increased for 16 consecutive years and is on track to be included in the Dividend Aristocrats index by the middle of the next decade. 

In Q3, share buybacks decreased the share count by nearly 1% year-over-year, and for the first nine months of the fiscal year, the reduction was 0.75%. 

Snap-on Advances, in Alignment With the Prevailing Trend

Snap-on’s stock price has struggled to gain traction over the past year, consolidating within a range, but this consolidation is within a larger bull market, setting the stock up to advance in 2026. The post-release action includes a 3% price increase, confirming support at current levels and a likelihood for higher price action by the end of the year.

The critical support level is near $330, and a pair of moving averages that includes the 150-day and 30-day EMAs, making it unlikely to be broken. The critical resistance is near $360 and could be reached by late November. In the long term, analysts' trends suggest that this market could exceed the $400 level by mid-2026.