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W.W. Grainger, Inc. (GWW) Hit a 52 Week High, Can the Run Continue?
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Have you been paying attention to shares of W.W. Grainger (GWW - Free Report) ? Shares have been on the move with the stock up 13.7% over the past month. The stock hit a new 52-week high of $595.39 in the previous session. W.W. Grainger has gained 14.4% since the start of the year compared to the -15.5% move for the Zacks Industrial Products sector and the -21.9% return for the Zacks Industrial Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 28, 2022, W.W. Grainger reported EPS of $8.27 versus consensus estimate of $7.19 while it beat the consensus revenue estimate by 1.51%.
For the current fiscal year, W.W. Grainger is expected to post earnings of $29.03 per share on $15.17 billion in revenues. This represents a 46.32% change in EPS on a 16.46% change in revenues. For the next fiscal year, the company is expected to earn $30.56 per share on $15.86 billion in revenues. This represents a year-over-year change of 5.25% and 4.55%, respectively.
Valuation Metrics
W.W. Grainger may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
W.W. Grainger has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 20.4X current fiscal year EPS estimates, which is a premium to the peer industry average of 13.9X. On a trailing cash flow basis, the stock currently trades at 25X versus its peer group's average of 11.4X. Additionally, the stock has a PEG ratio of 1.57. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, W.W. Grainger currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if W.W. Grainger fits the bill. Thus, it seems as though W.W. Grainger shares could still be poised for more gains ahead.
How Does GWW Stack Up to the Competition?
Shares of GWW have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Hudson Technologies, Inc. (HDSN - Free Report) . HDSN has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. Hudson Technologies, Inc. beat our consensus estimate by 47.50%, and for the current fiscal year, HDSN is expected to post earnings of $1.79 per share on revenue of $300.3 million.
Shares of Hudson Technologies, Inc. have gained 11.1% over the past month, and currently trade at a forward P/E of 5.1X and a P/CF of 10.15X.
The Industrial Services industry is in the top 38% of all the industries we have in our universe, so it looks like there are some nice tailwinds for GWW and HDSN, even beyond their own solid fundamental situation.
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W.W. Grainger, Inc. (GWW) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of W.W. Grainger (GWW - Free Report) ? Shares have been on the move with the stock up 13.7% over the past month. The stock hit a new 52-week high of $595.39 in the previous session. W.W. Grainger has gained 14.4% since the start of the year compared to the -15.5% move for the Zacks Industrial Products sector and the -21.9% return for the Zacks Industrial Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 28, 2022, W.W. Grainger reported EPS of $8.27 versus consensus estimate of $7.19 while it beat the consensus revenue estimate by 1.51%.
For the current fiscal year, W.W. Grainger is expected to post earnings of $29.03 per share on $15.17 billion in revenues. This represents a 46.32% change in EPS on a 16.46% change in revenues. For the next fiscal year, the company is expected to earn $30.56 per share on $15.86 billion in revenues. This represents a year-over-year change of 5.25% and 4.55%, respectively.
Valuation Metrics
W.W. Grainger may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
W.W. Grainger has a Value Score of C. The stock's Growth and Momentum Scores are B and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 20.4X current fiscal year EPS estimates, which is a premium to the peer industry average of 13.9X. On a trailing cash flow basis, the stock currently trades at 25X versus its peer group's average of 11.4X. Additionally, the stock has a PEG ratio of 1.57. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, W.W. Grainger currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if W.W. Grainger fits the bill. Thus, it seems as though W.W. Grainger shares could still be poised for more gains ahead.
How Does GWW Stack Up to the Competition?
Shares of GWW have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Hudson Technologies, Inc. (HDSN - Free Report) . HDSN has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of A, and a Momentum Score of D.
Earnings were strong last quarter. Hudson Technologies, Inc. beat our consensus estimate by 47.50%, and for the current fiscal year, HDSN is expected to post earnings of $1.79 per share on revenue of $300.3 million.
Shares of Hudson Technologies, Inc. have gained 11.1% over the past month, and currently trade at a forward P/E of 5.1X and a P/CF of 10.15X.
The Industrial Services industry is in the top 38% of all the industries we have in our universe, so it looks like there are some nice tailwinds for GWW and HDSN, even beyond their own solid fundamental situation.