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UBS Remains Sidelined on Grainger (GWW) as U.S. and Canada Drive EPS Miss

July 20, 2016 10:05 AM EDT
Get Alerts GWW Hot Sheet
Price: $1,017.98 -0.21%

Rating Summary:
    9 Buy, 20 Hold, 4 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 10 | New: 11
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UBS maintained a Neutral rating on WW Grainger (NYSE: GWW), and cut the price target to $225.00 (from $235.00), following the company's 2Q earnings report. GWW reported an EPS of $2.98, missing the consensus of $3.17. The miss was driven mainly by U.S. and Canada at segment level, and a higher tax rate.

Analyst Shannon O'Callaghan commented, "Grainger reported 2Q16 EPS of $2.98 vs. our $3.18 estimate (consensus of $3.17) driven mainly by the U.S. (-$0.13) and Canada (-$0.12) at segment level, and a higher tax rate (-$0.12). Organic sales declined 2% (vs. our +1.5%) with volume and price each down 1%. Price of -1% was an improvement from the -3% in 1Q, and gross margins are expected to see some benefit from the recent May 1 price increases, offset by negative volume deleverage. Organic daily sales slowed from flat in April to -4% in June (July sales tracking in line with June). Gross margins declined 200bps driven mainly by negative mix and price/cost, while operating margins of 12.6% declined 160bps y/y."

For an analyst ratings summary and ratings history on WW Grainger click here. For more ratings news on WW Grainger click here.

Shares of WW Grainger closed at $217.78 yesterday.



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