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Based in Lake Forest, Illinois, W.W. Grainger, Inc. (GWW) is a leading business-to-business distributor of maintenance, repair, and operating (MRO) products with a market cap of $44.7 billion. The company serves a diverse range of industries through its High-Touch Solutions N.A. and Endless Assortment segments.
Companies valued at $10 billion or more are generally considered "large-cap" stocks, and W.W. Grainger fits this criterion perfectly. W.W. Grainger is renowned for its extensive catalog of industrial supplies, serving over three million customers globally through 598 branches, 33 distribution centers, and robust online platforms, distinguishing itself as a critical provider in the MRO market.
However, the industrial supply company has declined nearly 12% from its 52-week high of $1,034.18, reached in March. Over the past three months, shares of GWW have fallen 9.7%, showing a pronounced decline compared to the broader Dow Jones Industrials Average's ($DOWI) marginal dip over the same period.
Nevertheless, W.W. Grainger has risen 9.8% on a YTD basis, outperforming the DOWI's 3.8% gain. Additionally, over the past 52 weeks, GWW shares have surged 23.3%, outpacing the DOWI’s nearly 16% return during the same period.
GWW has shown a bullish trend, consistently trading above its 200-day moving average since last year. But, since April, the stock has dipped below its 50-day moving average, indicating some recent weakness.
GWW has outperformed over the past year due to strong market positioning in maintenance, repair, and operations products, bolstered by robust financial management, including share repurchases and consistent dividend increases. Yet, the stock fell 1.1% on Apr. 25 after its mixed Q1 earnings report, which showed revenue growth slightly below forecasts and a decline in gross profit margins at its online-only segment, Zoro. Despite an increase in earnings per share, these factors contributed to investor disappointment and selling pressure on the stock.
However, to emphasize GWW’s outperformance, its rival, Fastenal Company (FAST), has lagged behind GWW. Fastenal has seen a marginal decline on a YTD basis and gained 13.3% over the past 52 weeks, underperforming GWW in both periods.
Despite the stock's outperformance over the past year, analysts are cautious about its prospects, with a consensus “Hold” rating from the 11 analysts covering the stock, and the mean price target of $1,015.25 suggests a premium of 11.6% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
