We Believe Strong Vehicle Repair Demand Will Support Top-Line Growth for Narrow-Moat Snap-on

Snap-on’s first-quarter results showed demand for automotive tools and software was strong. We raised our near-term sales and margin forecast to reflect growing vehicle repair demand. In 2022, we now expect sales to grow over 4% year on year to $4.4 billion, while we project operating margins to come in over 19%. As a result, our fair value estimate increased to $184 from $180 previously. That said, we still view Snap-on’s shares as overvalued, which currently trade approximately 22% above our fair value estimate.