New research from Wall Street analysts missed the mark on two of our industrial-focused stocks. The news on Stanley Black & Decker Baird increased Stanley Black & Decker’s price target to $104 per share from $94. That’s nearly 2% lower than Friday’s close. Analysts cited “slightly worse trends” in residential repair and remodeling — a key end market for the maker of power tools. Baird reiterated its hold-equivalent rating on shares, arguing Stanley Black & Decker’s “turnaround progress remains a key focus.” The stock was down modestly Monday. SWK YTD mountain Stanley Black & Decker YTD Big picture Stocks tied to housing like Stanley Black & Decker have been under pressure lately because the 10-year Treasury yield keeps rising despite the Federal Reserve’s jumbo 50-basis-point interest rate cut last month and signals of further easing into year-end and beyond. Mortgage rates tend to follow the 10-year yield — so, they haven’t dropped, yet. Bottom line The 10-year is “killing Stanley” right now, Jim Cramer said Monday. That’s because higher-for-longer mortgage rates keep the pressure on housing. But we still expect mortgages to eventually come down as the Fed continues to cut policy rates. That’s why we disagree with Baird’s call and encourage patience. We have the stock at a 2 rating , with a $115-per-share price target. Stanley Black & Decker “will be ignited when those [rate cuts] start occurring in earnest,” he said. “This is the one hated stock, which I really like.” The news on DuPont Morgan Stanley hiked DuPont’s price target to $94 per share from $88. That implies more than 10% upside from Friday’s close. However, analysts did not upgrade the stock — keeping their hold-equivalent rating. They did praise DuPont’s forthcoming split into three publicly traded companies, saying the move “naturally presents additional upside cases.” In particular, Morgan Stanley cited DuPont’s water business as the easiest way to “envision a valuation uplift.” Shares of the chemicals giant fell less than 1% on Monday. DD YTD mountain DuPont de Nemours (DD) year-to-date performance Big picture DuPont stock was on a tear after the company announced its spinoff plans in May. Shares then hit multi-year highs back in September, levels not seen since June 2017. Despite the initial excitement, DuPont’s spinoff has been viewed as a mixed bag by Wall Street analysts. Barclays, for example, downgraded the stock to a sell-equivalent rating earlier this month. Bottom line Like Morgan Stanley, we agree that DuPont’s split will benefit shareholders. But Jim said analysts should have upgraded the stock. “It should be a buy because the stock is way too cheap,” Jim said. The Club has a $100-per-share price target on DuPont shares. “I want to own the soon-to-be-public water and electronics companies, along with classic DuPont. All three will benefit from the separation,” he added. (Jim Cramer’s Charitable Trust is long SWK, DD. See here for a full list of the stocks.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust’s portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
New research from Wall Street analysts missed the mark on two of our industrial-focused stocks.