Citi analysts have warned that Stanley Black & Decker (SWK) may encounter heightened earnings risk due to a potential 100% tariff on Chinese imports, a scenario that could contribute to increased stock volatility in the near term.

The company recently reported a 2.7% free cash flow margin and an 8.6% year-over-year decline in earnings per share, reflecting challenges in organic revenue growth and rising capital intensity. These factors, combined with potential trade-related tariffs, underscore the financial and operational pressures facing the industrial tools and hardware manufacturer.

Investors are monitoring how macro trade developments and internal growth constraints may influence SWK’s performance and market valuation in the coming quarters.