Snap-on Incorporated (SNA): A Bull Case Theory

We came across a bullish thesis on Snap-on Incorporated on The Reservist’s Substack by Yehoshua Zlotogorski. In this article, we will summarize the bulls’ thesis on SNA. Snap-on Incorporated’s share was trading at $321.19 as of July 31^st. SNA’s trailing and forward P/E were 17.11 and 17.24, respectively according to Yahoo Finance.

Snap-On’s latest earnings report reinforces the author’s conviction in a trade built on a favorable risk/reward setup. The position, entered with a tight downside near $300 (a 3% loss), is based on Snap-On’s strong fundamentals and dominant market position, which help anchor valuation. The key bullish thesis is that the post-pandemic lull in tool and equipment purchases—now entering its final stages- will fade by late 2025 into 2026, setting up for a cyclical rebound.

This quarter supports that view: the Tools Group returned to growth (+1.7%) after four quarters of decline, RS&I also expanded, and while C&I fell 8%, the drop was attributed largely to temporary effects, with a recovery seen as the quarter progressed. Management continues to deflect with macro and geopolitical explanations, but the author sees the stagnation as a result of pandemic-era pull-forward, supported by weak financing data for big-ticket items.

As these loans roll off over their typical four-year cycles, demand should return. The author also sees Snap-On as a likely beneficiary of tariff relief and potential industrial spending from the so-called “Big Beautiful bill,” both of which could drive relative outperformance. Meanwhile, margins remain strong, cash builds, buybacks persist, and the 2.75% dividend provides a steady return while awaiting the upturn.

The stock could rise 30% back to its historical $370–390 range, with minimal downside. Sized at 4% of the portfolio, the position provides lower beta industrial exposure while retaining the upside target common across the author’s broader trading strategy. Further adds are possible on dips near $300.

Previously, we covered a bullish thesis on Snap-on Incorporated (SNA) by William Fleming-Daniels in November 2024, which highlighted strong margins, stable cash flow, and long-term growth. The company’s stock has depreciated ~11% since our coverage, as the thesis hasn’t played out yet. Yehoshua Zlotogorski shares a similar view but emphasizes a near-term cyclical rebound driven by financing roll-offs.

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Disclosure: None.