Zacks Investment Research Lowers W W Grainger (GWW) to Strong Sell

Zacks Investment Research downgraded shares of W W Grainger (NYSE:GWW) from a hold rating to a strong sell rating in a research note published on Tuesday morning.

According to Zacks, “Grainger’s anticipates sales growth in the range of 1.5-2.5% and earnings per share to lie between $10.40 and $10.90 for 2017. The midpoint of the earnings guidance reflects an 8% year-over-year decline due to ongoing challenges in Canada operations and headwind from the sale of the specialty business. Grainger’s Canada business is struggling due to higher expenses and weakness in the energy sector. Inflationary expenses due to the incremental investments in the single channel online business and digital marketing will pressure Grainger's margins. In addition, Grainger’s new web pricing strategy that was launched to reverse unfavorable market share trends will affect margins in the short term. It remains to be seen whether the company can retain its customer base if its competitors also resort to slashing prices. “

A number of other analysts also recently issued reports on the company. Credit Suisse Group reaffirmed an underperform rating and issued a $190.00 price objective (up previously from $172.00) on shares of W W Grainger in a research note on Tuesday, January 9th. They noted that the move was a valuation call. Royal Bank of Canada reaffirmed a sell rating and issued a $192.00 price objective on shares of W W Grainger in a research note on Thursday, January 4th. TheStreet raised W W Grainger from a c+ rating to a b- rating in a research note on Wednesday, December 13th. KeyCorp reaffirmed a hold rating on shares of W W Grainger in a research note on Monday, November 13th. Finally, Oppenheimer reaffirmed a buy rating and issued a $245.00 price objective on shares of W W Grainger in a research note on Monday, November 13th. Seven analysts have rated the stock with a sell rating, eleven have assigned a hold rating and one has issued a buy rating to the company. The company has a consensus rating of Hold and a consensus price target of $195.77.

W W Grainger (NYSE:GWW) traded up $2.52 during trading hours on Tuesday, reaching $230.05. The company’s stock had a trading volume of 658,246 shares, compared to its average volume of 795,218. The company has a current ratio of 2.28, a quick ratio of 1.28 and a debt-to-equity ratio of 1.19. W W Grainger has a 1-year low of $155.00 and a 1-year high of $262.71. The company has a market cap of $13,110.00, a P/E ratio of 27.29, a price-to-earnings-growth ratio of 2.12 and a beta of 0.82.

W W Grainger (NYSE:GWW) last released its quarterly earnings data on Tuesday, October 17th. The industrial products company reported $2.90 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $2.56 by $0.34. W W Grainger had a return on equity of 34.25% and a net margin of 4.83%. The business had revenue of $2.64 billion for the quarter, compared to the consensus estimate of $2.65 billion. During the same quarter in the previous year, the company posted $3.06 EPS. The company’s revenue was up 1.5% compared to the same quarter last year. equities research analysts expect that W W Grainger will post 10.71 EPS for the current fiscal year.

In other news, VP Paige K. Robbins sold 346 shares of the business’s stock in a transaction that occurred on Thursday, October 26th. The stock was sold at an average price of $202.31, for a total transaction of $69,999.26. Following the transaction, the vice president now owns 8,400 shares of the company’s stock, valued at approximately $1,699,404. The transaction was disclosed in a filing with the SEC, which is accessible through the SEC website. Also, VP Laura D. Brown sold 9,158 shares of the business’s stock in a transaction that occurred on Thursday, January 11th. The shares were sold at an average price of $232.86, for a total value of $2,132,531.88. Following the transaction, the vice president now directly owns 16,893 shares in the company, valued at approximately $3,933,703.98. The disclosure for this sale can be found here. In the last three months, insiders have sold 30,504 shares of company stock worth $6,834,291. Corporate insiders own 9.60% of the company’s stock.

Hedge funds and other institutional investors have recently added to or reduced their stakes in the company. Tredje AP fonden grew its position in W W Grainger by 32.2% in the 3rd quarter. Tredje AP fonden now owns 3,450 shares of the industrial products company’s stock valued at $620,000 after acquiring an additional 840 shares during the last quarter. Ronna Sue Cohen bought a new position in W W Grainger in the 3rd quarter valued at $3,651,000. Koch Industries Inc. grew its position in W W Grainger by 27,293.0% in the 2nd quarter. Koch Industries Inc. now owns 471,433 shares of the industrial products company’s stock valued at $469,000 after acquiring an additional 469,712 shares during the last quarter. Moors & Cabot Inc. bought a new position in W W Grainger in the 2nd quarter valued at $1,195,000. Finally, Pinebridge Investments L.P. grew its position in W W Grainger by 47.1% in the 3rd quarter. Pinebridge Investments L.P. now owns 5,128 shares of the industrial products company’s stock valued at $921,000 after acquiring an additional 1,642 shares during the last quarter. 85.09% of the stock is currently owned by hedge funds and other institutional investors.

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About W W Grainger

W.W. Grainger, Inc (Grainger) is a distributor of maintenance, repair and operating (MRO) supplies and other related products and services. The Company offers its products and services to businesses and institutions in the United States and Canada, with presence also in Europe, Asia and Latin America.

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