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WESCO International (WCC)

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WESCO International (WCC) is one of the largest distributors of electrical products in the U.S. The company's third quarter results beat the Zacks Consensus and forward guidance was encouraging.

WESCO's strong market position, the improved conditions in the industrial and utility markets, strengthening construction markets, the global account model, restructuring benefits and the LEAN initiative are strong positives. Therefore, although results bear a positive correlation to GDP growth (which was not that impressive in 2011) and operating margins continue to lag the company's target, we think the time is right to buy the shares.

We therefore upgrade the shares to Outperform from Neutral. We have set a target price of $67 (15.4X P/E), which is a premium to the peer group.

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