WESCO International (WCC) PT Lowered to $205 at KeyBanc Amid 'Macro Uncertainty'

KeyBanc analyst Ken Newman lowered the price target on WESCO International (NYSE: WCC) to $205.00 (from $245.00) while maintaining an Overweight rating.

The analyst commented: "Lowering PT to $205 from $245. We continue to view WCC as our favorite risk-on play within our coverage, with the Company offering a solid combination of strong secular electrical utility/data center demand visibility, an improving capital structure to support stronger cash generation, and an attractive valuation relative to both its peers and its own historical average. While we acknowledge that WCC could experience higher volatility amid ongoing macro uncertainty, we think WCC’s backlog should support better revenue visibility through 2025 vs its. puro MRO peers. Additionally, we think concerns around WCC’s data center exposure may be overdone, as we think WCC tends to play later in the data center construction cycle vs. its gray-space providers (we estimate WCC tends to lag suppliers ETN and VRT by 2-3 quarters). From a capital structure perspective, we think WCC’s impending takeout of its 10.625% preferred stock should support stronger cash flow generation. We note our new $205 PT implies 9.7x and 9.1x EV/EBITDA on our 2025 and 2026 estimates, respectively, vs its historical average of 9.0x."

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