FBR Industrial Distributor Survey: 1Q11 Sales Tracking Ahead of Expectations; Raising Estimates for WESCO (WCC) and Grainger (GWW)
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Rating Summary:
22 Buy, 8 Hold, 0 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 7 | Down: 5 | New: 25
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FBR Industrial Distributor Survey: 1Q11 Sales Tracking Ahead of Expectations; Raising Estimates for WESCO and Grainger
FBR analyst says, "We recently conducted our spring 2011 quarterly FBR Industrial Survey, with more than 200 participants covering all major U.S. industrial regions with feedback from distributors of Industrial MRO, Electrical, and HVAC products. Although results vary by product category/market, overall tone and commentary was positive and it appears that solid sales momentum from the fourth quarter has continued into 2011."
"On an overall basis, 80% of participants indicated that sales were in line or above expectations and a significant 57% (54% last quarter) cited a sequential increase in daily sales versus 4Q. Only a relatively small 21% saw a sequential decline. Distributors for Industrial MRO and Electrical products were most upbeat about 1Q performance and the 2011 outlook, reflecting continued solid MRO and retrofit spending trends across industrial markets."
"Raising estimates for WESCO (NYSE: WCC) and Grainger (NYSE: GWW), reflecting better 1Q trends. Reflecting positive sales and pricing trends, we are raising estimates for WESCO and Grainger. For WESCO, we are increasing our 1Q11/2011 estimates from $0.70/$3.65 to $0.72/$3.70, and our maintaining our recently raised price target of $75, or 16x our 2012 estimate, and reiterate our Outperform rating. For Grainger, we are raising our 1Q11/2011/2012 estimates from $1.75/$7.70/$8.50 to $1.80/$7.90/$8.70. We are also raising our price target from $125 to $135, which assumes shares trade in line to the 2011 target multiple of 17x our estimate, and maintaining our Market Perform rating."
FBR analyst says, "We recently conducted our spring 2011 quarterly FBR Industrial Survey, with more than 200 participants covering all major U.S. industrial regions with feedback from distributors of Industrial MRO, Electrical, and HVAC products. Although results vary by product category/market, overall tone and commentary was positive and it appears that solid sales momentum from the fourth quarter has continued into 2011."
"On an overall basis, 80% of participants indicated that sales were in line or above expectations and a significant 57% (54% last quarter) cited a sequential increase in daily sales versus 4Q. Only a relatively small 21% saw a sequential decline. Distributors for Industrial MRO and Electrical products were most upbeat about 1Q performance and the 2011 outlook, reflecting continued solid MRO and retrofit spending trends across industrial markets."
"Raising estimates for WESCO (NYSE: WCC) and Grainger (NYSE: GWW), reflecting better 1Q trends. Reflecting positive sales and pricing trends, we are raising estimates for WESCO and Grainger. For WESCO, we are increasing our 1Q11/2011 estimates from $0.70/$3.65 to $0.72/$3.70, and our maintaining our recently raised price target of $75, or 16x our 2012 estimate, and reiterate our Outperform rating. For Grainger, we are raising our 1Q11/2011/2012 estimates from $1.75/$7.70/$8.50 to $1.80/$7.90/$8.70. We are also raising our price target from $125 to $135, which assumes shares trade in line to the 2011 target multiple of 17x our estimate, and maintaining our Market Perform rating."
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