W.W. Grainger Earnings Preview

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Investors are on the edge of their collective seats, hoping that W.W. Grainger (NYS: GWW) will top analyst expectations for the fifth consecutive quarter. The company will unveil its latest earnings Tuesday. W.W. Grainger distributes facilities maintenance products and provides services and related information used by businesses and institutions throughout North America.

What analysts say:

  • Buy, sell, or hold?: Analysts think investors should stand pat on W.W. Grainger with seven of 12 analysts rating it hold. Analysts don't like W.W. Grainger as much as competitor Houston Wire & Cable Company overall. Three out of four analysts rate Houston Wire & Cable a buy compared with five of 12 for W.W. Grainger. Analysts still rate the stock a hold, but they are a bit more wary about it compared with three months ago.
  • Revenue Forecasts: On average, analysts predict $2.09 billion in revenue this quarter. That would represent a rise of 10% from the year-ago quarter.
  • Wall Street Earnings Expectations: The average analyst estimate is earnings of $2.34 per share. Estimates range from $2.28 to $2.42.

What our community says:
CAPS All-Stars are solidly behind the stock with 96.2% giving it an "outperform" rating. The community at large agrees with the All-Stars with 92.2% assigning it a rating of "outperform." Fools are gung-ho about W.W. Grainger, though the message boards have been quiet lately with only 79 posts in the past 30 days. Despite the majority sentiment in favor of W.W. Grainger, the stock has a middling CAPS rating of three out of five stars.

Management:
W.W. Grainger's profit has risen year over year by an average of 32.8% over the past five quarters.

Now let's look at how efficient management is at running the business. Traditionally, margins represent the efficiency with which companies capture portions of sales dollars. The following table shows gross, operating, and net margins over the past four quarters.

Quarter

Q2

Q1

Q4

Q3

Gross Margin

43.1%

44%

41.8%

41.6%

Operating Margin

13.2%

13.9%

11.6%

13.2%

Net Margin

8.5%

8.4%

7.2%

7.9%

One final thing: If you want to keep tabs on W.W. Grainger movements, and for more analysis on the company, make sure you add it to your watchlist.

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At the time this article was published

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