Back to top

Image: Bigstock

W.W. Grainger, Acuity Brands and Western Digital highlighted as Zacks Bull and Bear of the Day

Read MoreHide Full Article

For Immediate Release

Chicago, IL – April 27, 2018 – Zacks Equity Research highlights W.W. Grainger, Inc. (GWW - Free Report) as the Bull of the Day, Acuity Brands, Inc. (AYI - Free Report) as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Western Digital Corp. (WDC - Free Report) .

Here is a synopsis of all three stocks:

Bull of the Day:

W.W. Grainger, Inc. hit it out of the park in the first quarter. This Zacks Rank #1 (Strong Buy) recently raised full year sales and EPS guidance.

Grainger is the leading North American broad line supplier of maintenance, repair and operating products (MRO), with operations also in Europe, Asia and Latin America.

Big Beat in the First Quarter

On Apr 19, Grainger reported its first quarter results and blew by the Zacks Consensus Estimate by 22%.

Earnings were $4.18 versus the Zacks Consensus of $3.41.

It was the fourth earnings beat in a row.

Sales rose 9% to $2.8 billion compared to $2.5 billion in the first quarter of 2017 led by increased volume with both large and medium customers in the U.S. business. It's yet another sign that the U.S. economy is strong.

It saw improved performance in Canada but Canada is still in the early stages of a turnaround.

Canada and the U.S. represented 79% of the sales in the quarter. U.S. sales rose 8% while Canada declined 2% year-over-year.

It's other business segments saw sales up 18%, with 12% due to volume and pricing and 6% from foreign currency exchange. It saw improved performance in its international business.

Raised 2018 Guidance

Given the strong first quarter, the company raised its 2018 sales and EPS guidance.

It now sees sales growth between 5% and 8%, up from its previous guidance of 3 to 7%.

Earnings per shares are forecast between $14.30 and $15.30, up from its prior guidance of $12.95 to $14.15.

As a result, the analysts are raising their full year estimates. 6 estimates have been raised for 2018 since the report.

That has pushed the 2018 Zacks Consensus Estimate up to $14.69 from $14.23 which is earnings growth of 28.2% over 2017.

But the analysts are also bullish about 2019. 6 estimates have been raised for next year as well.

The 2019 Zacks Consensus has jumped to $16.59 from $16.14 in the last month. That's another 13% earnings growth.

Raised the Dividend Again

On Apr 25, Grainger announced that it was raising its quarterly dividend by 6.3% to $1.36.

It's payable on June 1 to shareholders of record as of May 14, 2018.

This is the 47th consecutive year that the company has raised its dividend.

That's an incredible streak that few companies can match.

The dividend is currently yielding 1.8%.

Shares at 5-Year Highs

2017 was the year to buy the stock as it hit new lows.

Bear of the Day:

Acuity Brands, Inc. missed for the second quarter in a row as the lighting market remains weak. This Zacks Rank #5 (Strong Sell) is expected to grow earnings by just 1.9% in Fiscal 2018.

Acuity Brands is one of the leading providers of lighting and building management solutions in North America. It has operations throughout North America, Europe and Asia.

It's products are sold under various brands including Lithonia Lighting, Holophane, Peerless, Gotham, Mark Architectural Lighting, Juno, Indy, Aculux, Antique Street Lamps, nLight, ROAM, Atrius and Lucid, among others.

Another Miss in the Second Quarter

On Apr 4, Acuity reported fiscal second quarter results and missed the Zacks Consensus Estimate by 10.4%. Earnings were $1.89 versus the Zacks Consensus of $2.11.

It was the second miss in a row.

Sales were up 3.4% to $832.1 million from $804.7 million in the year ago quarter.

Lighting in the US was flat to down single digits so Acuity did exceed the industry standards, but non-residential construction lighting continues to be weak.

One bright spot was greater shipments of Atrius-based luminaires to customers in certain key vertical applications but this was partially offset by lower shipments for larger commercial projects and through the home center/showroom sales channel.

Estimates Slashed for Fiscal 2018 and Fiscal 2019

The company described the current lighting environment as "challenging" but third party forecasts indicate rising demand in the North American market later in calendar 2018.

However, the company has seen soft order activity in certain sales channels in the near term, which indicates continued market weakness.

It expects headwinds in the home center/showroom sales channel to continue in the near term, with growth returning in the second half of calendar 2018.

Not surprisingly, the analysts have taken a bearish view of earnings for both Fiscal 2018 and even Fiscal 2019.

8 estimates were cut for fiscal 2018 since the earnings report, with the Zacks Consensus Estimate dropping to $8.61 from $9.32 in that time. That is earnings growth of just 1.9% compared to 2017.

While analysts are also negative on fiscal 2019, they see a return to growth.

7 estimates were also cut for fiscal 2019, but one was raised, since the report as well. That has pushed the 2019 Zacks Consensus down to $9.61 from $10.03 just a month ago. That's earnings growth of 11.6%.

Shares Plunge

Acuity was once the darling of Wall Street with the shares hitting new highs but they've fallen 49% over the last 2 years and are down 30% in 2018.

Additional content:

Western Digital (WDC - Free Report) Posts Big Earnings Beat

Western Digital Corp. just released its latest quarterly financial results, posting earnings of $3.63 per share and revenues of $5 billion.

Currently, WDC is a Zacks Rank #1 (Strong Buy), but that could change based on today’s results. Estimates have increased by 14 cents for the current year over the last two months, and the Zacks Consensus sits at $14.05 per share.

Shares of the memory chip maker have increased just a little over 1% in the last year and closed the trading day up over 2.3%. The stock is up about 1.5% in after-hours trading shortly after the earnings report was released.

Western Digital:

Beat earnings estimates. The company reported earnings of $3.63 per share, surging past the Zacks Consensus Estimate of $3.31 per share. Net income was $1.1 billion for the quarter.

Beat revenues estimates.The company saw revenues of $5 billion, also topping our consensus estimate of $4.94 billion and growing 7.5% year-over-year.

GAAP operating income was $914 million.

Additionally, WDC generated $1 billion in cash from operations during Q3, and ended the period with $5.1 billion of total cash, cash equivalents and available-for-sale securities. The company declared a cash dividend of 50 cents per share as well.

“The power and agility of our platform and our global team’s sustained focus on operational execution drove another quarter of strong financial performance for Western Digital,” said Steve Milligan, chief executive officer. “We saw particular strength in our high capacity enterprise hard drives, which achieved record quarterly revenue.”

Western Digital addresses ever-changing market needs by providing a full portfolio of compelling, high-quality storage solutions with customer-focused innovation, high efficiency, flexibility and speed. Its products are marketed under the HGST, SanDisk and WD brands to OEMs, distributors, resellers, cloud infrastructure providers and consumers. The company's devices and solutions are made using either rotating magnetic or NAND-flash technologies.

More Stock News: This Is Bigger than the iPhone!

It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.

Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020. Click here for the 6 trades >>

Get today’s Zacks #1 Stock of the Day with your free subscription to Profit from the Pros newsletter:

About the Bull and Bear of the Day

Every day, the analysts at Zacks Equity Research select two stocks that are likely to outperform (Bull) or underperform (Bear) the markets over the next 3-6 months.

About Zacks Equity Research

Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.

Continuous analyst coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.

Strong Stocks that Should Be in the News

Many are little publicized and fly under the Wall Street radar. They're virtually unknown to the general public. Yet today's 220 Zacks Rank #1 "Strong Buys" were generated by the stock-picking system that has nearly tripled the market from 1988 through 2015. Its average gain has been a stellar +26% per year. See these high-potential stocks free >>.

Follow us on Twitter:  https://twitter.com/zacksresearch

Join us on Facebook:  https://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts

Zacks Investment Research is under common control with affiliated entities (including a broker-dealer and an investment adviser), which may engage in transactions involving the foregoing securities for the clients of such affiliates.

Media Contact

Zacks Investment Research

800-767-3771 ext. 9339

support@zacks.com

https://www.zacks.com

Zacks.com provides investment resources and informs you of these resources, which you may choose to use in making your own investment decisions. Zacks is providing information on this resource to you subject to the Zacks "Terms and Conditions of Service" disclaimer. www.zacks.com/disclaimer.

Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Western Digital Corporation (WDC) - free report >>

W.W. Grainger, Inc. (GWW) - free report >>

Acuity Brands Inc (AYI) - free report >>