W.W. Grainger, Inc. (GWW): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Summary:
Grainger reported fourth-quarter adjusted earnings of $2.80 per share, which was up 8% year over year. Revenues rose 6%. Grainger remains optimistic about its opportunities in the MRO market and single channel online model businesses. Additionally, the company will benefit from continued investment. However, Grainger lowered its 2015 guidance and now expects sales growth of 3 7% and earnings per share at $12.60 to $13.60. This reflects foreign currency translation due to further weakening of the Canadian and Japanese currencies, as well as the low inflationary environment in the U.S. Thus, we are reaffirming our Neutral recommendation on Grainger with a target price of $247.


Overview:

Incorporated in 1928, in the State of Illinois, W.W. Grainger Inc. (GWW) is a leading North American distributor of material handling equipment, safety and security supplies, lighting and electrical products, power and hand tools, pumps and plumbing supplies, cleaning and maintenance supplies, forestry and agriculture equipment, building and home inspection supplies, vehicle and fleet components, and various aftermarket components. It also offers services comprising inventory management and energy efficiency solutions. The company has a multi-channel business model consisting of a network of branches, a field sales force, direct marketing and Internet channels. Grainger has operating facilities, both self-owned as well as leased across the U.S. and Canada.

The company reports revenues under two business segments the United States, which contributed 78% to total revenue in the third quarter of 2014 and Canada with a contribution of 11%. The businesses from operating units in Japan, Mexico, India, Puerto Rico, China, Panama and Columbia and Fabory Group are all combined and included in Other Businesses and are not individually considered as reportable segments. The Other Businesses contributed nearly 11% to the company's revenue for the quarter.


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.




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