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Grainger (GWW) Hits 52-Week High: What's Aiding Its Rally?
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W.W. Grainger, Inc. (GWW - Free Report) shares scaled a new 52-week high of $998.41 on Mar 4 before closing the session lower at $987.60.
GWW has a market capitalization of $48.2 billion. In the past year, shares of the company have gained 42.5% compared with the industry’s 19.8% growth.
Image Source: Zacks Investment Research
What’s Driving Grainger?
Solid 2023 Performance: In 2023, the company reported strong results in both segments. The High-Touch Solutions North America segment gained from continued volume growth across all geographies and strong price realization.
The segment’s gross margin was driven by an improved product mix, and sustained freight and supply-chain efficiencies. The segment will continue to benefit from pricing actions, and strength in commercial, transportation and heavy manufacturing.
The Endless Assortment segment continues to be aided by customer acquisition across the segment and repeat customer growth at MonotaRO.
Upbeat 2024 Outlook: The company’s margin will continue to gain traction from its improved product mix, lower freight costs, pricing actions and its ability to navigate supply-chain challenges. Grainger’s strategic initiatives and efforts to increase market share across the business are driving growth.
GWW expects earnings per share of $38.00-$40.50 for 2024. The mid-point of the guidance indicates 39.3% growth from the 2023 reported figure. Grainger expects net sales between $17.2 billion and $17.7 billion. Sales are expected to grow 4.3-7.3%. Daily sales growth is envisioned at 4-7%. The company’s initiatives and supply-chain advantages are likely to aid GWW in meeting its guidance.
Focus on Growth: Grainger is investing in non-pandemic product inventory and partnering with suppliers to mitigate supply-related challenges, inbound lead time challenges and any possible cost increases. The company is also focused on improving the end-to-end customer experience by investing in its e-commerce and digital capabilities and executing improvement initiatives within its supply chain.
The company continues to develop online capabilities that promote a personalized, relevant and effortless experience for each customer through Grainger.com, eProcurement connections and mobile applications. Grainger’s Canada business is an attractive market and is expected to deliver double-digit operating margin growth over the next five years. The company has been focused on reducing its cost structure in its Canada operations to drive profitable growth.
Grainger has been managing inventory effectively to drive profitability and is focused on making incremental investments in marketing and merchandising.
The Zacks Consensus Estimate for Proto Labs’ 2024 earnings is pegged at $1.62 per share. The consensus estimate for 2024 earnings has moved 11% north in the past 60 days and suggests year-over-year growth of 1.9%. The company has a trailing four-quarter average earnings surprise of 42.2%. PRLB shares have gained 15.7% in the past year.
The Zacks Consensus Estimate for AZZ’s fiscal 2024 earnings per share is pegged at $4.19. The consensus estimate for 2024 earnings has moved north by 2% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 76.7% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 32.2% in the past year.
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Grainger (GWW) Hits 52-Week High: What's Aiding Its Rally?
W.W. Grainger, Inc. (GWW - Free Report) shares scaled a new 52-week high of $998.41 on Mar 4 before closing the session lower at $987.60.
GWW has a market capitalization of $48.2 billion. In the past year, shares of the company have gained 42.5% compared with the industry’s 19.8% growth.
Image Source: Zacks Investment Research
What’s Driving Grainger?
Solid 2023 Performance: In 2023, the company reported strong results in both segments. The High-Touch Solutions North America segment gained from continued volume growth across all geographies and strong price realization.
The segment’s gross margin was driven by an improved product mix, and sustained freight and supply-chain efficiencies. The segment will continue to benefit from pricing actions, and strength in commercial, transportation and heavy manufacturing.
The Endless Assortment segment continues to be aided by customer acquisition across the segment and repeat customer growth at MonotaRO.
Upbeat 2024 Outlook: The company’s margin will continue to gain traction from its improved product mix, lower freight costs, pricing actions and its ability to navigate supply-chain challenges. Grainger’s strategic initiatives and efforts to increase market share across the business are driving growth.
GWW expects earnings per share of $38.00-$40.50 for 2024. The mid-point of the guidance indicates 39.3% growth from the 2023 reported figure. Grainger expects net sales between $17.2 billion and $17.7 billion. Sales are expected to grow 4.3-7.3%. Daily sales growth is envisioned at 4-7%. The company’s initiatives and supply-chain advantages are likely to aid GWW in meeting its guidance.
Focus on Growth: Grainger is investing in non-pandemic product inventory and partnering with suppliers to mitigate supply-related challenges, inbound lead time challenges and any possible cost increases. The company is also focused on improving the end-to-end customer experience by investing in its e-commerce and digital capabilities and executing improvement initiatives within its supply chain.
The company continues to develop online capabilities that promote a personalized, relevant and effortless experience for each customer through Grainger.com, eProcurement connections and mobile applications. Grainger’s Canada business is an attractive market and is expected to deliver double-digit operating margin growth over the next five years. The company has been focused on reducing its cost structure in its Canada operations to drive profitable growth.
Grainger has been managing inventory effectively to drive profitability and is focused on making incremental investments in marketing and merchandising.
Zacks Rank and Other Stocks to Consider
GWW currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the Industrial Products sector are Proto Labs, Inc. (PRLB - Free Report) , AZZ Inc. (AZZ - Free Report) and Applied Industrial Technologies (AIT - Free Report) . While PRLB sports a Zacks Rank #1 (Strong Buy), AZZ and AIT carry a Zacks Rank #2 each at present. You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Proto Labs’ 2024 earnings is pegged at $1.62 per share. The consensus estimate for 2024 earnings has moved 11% north in the past 60 days and suggests year-over-year growth of 1.9%. The company has a trailing four-quarter average earnings surprise of 42.2%. PRLB shares have gained 15.7% in the past year.
The Zacks Consensus Estimate for AZZ’s fiscal 2024 earnings per share is pegged at $4.19. The consensus estimate for 2024 earnings has moved north by 2% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 37.6%. AZZ shares have rallied 76.7% in the past year.
Applied Industrial has an average trailing four-quarter earnings surprise of 13.9%. The Zacks Consensus Estimate for AIT’s 2024 earnings is pinned at $9.43 per share, which indicates year-over-year growth of 7.8%. Estimates have been unchanged in the past 60 days. The company’s shares have gained 32.2% in the past year.