Grainger Reports Stellar Q3 Results; Shares Surge 7.5%

Grainger (GWW) shares jumped 7.5% on October 29 after the industrial supply company’s third-quarter results exceeded expectations, with it also reaffirming its fiscal year 2021 guidance.

The quarterly performance was driven by robust demand for core products coupled with market share gains and margin expansion in both of its segments.

Notably, adjusted earnings per share (EPS) of $5.65 grew 25% year-over-year and surpassed analysts’ expectations of $5.30 per share. The company reported earnings of $4.52 per share for the same quarter last year.

Further, net sales jumped 11.7% year-over-year to $3.4 billion and exceeded consensus estimates of $3.32 billion. The increase in revenues reflected a surge in High-Touch Solutions sales, which increased 12%, coupled with a 12.7% growth in the Endless Assortment segment sales. (See GWW stock charts on TipRanks)

Based on robust Q3 results, Grainger forecasts FY2021 revenues to fall near the midpoint of the previously guided range of $12.7-13 billion, against the consensus estimate of $12.83 billion.

Furthermore, earnings and the other metrics are expected to range between the low end and the midpoint of the previous guidance. The company forecasts adjusted earnings per share in the range of $19.00-$20.50 per share, while the consensus estimate is pegged at $19.13 per share.  

Looking ahead, Grainger CEO, DG Macpherson, commented, “Despite the current market and supply chain uncertainties, we are confident in our ability to deliver solid performance in the fourth quarter and into 2022.”

Overall, the stock has a Hold consensus rating based on 3 Buys, 3 Holds, and 2 Sells. The average Grainger price target of $467.14 implies that shares are fully valued at current levels. Shares of GWW have jumped 27.5% over the past year.

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