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 31st. SNA’s trailing and forward P/E were 17.11 and 17.24, respectively according to Yahoo Finance.
An engineer at a workbench surrounded by automotive parts, tools, and microchips.
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.
Snap-on Incorporated is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 36 hedge fund portfolios held SNA at the end of the first quarter which was 32 in the previous quarter. While we acknowledge the potential of SNA as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.
