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W.W. Grainger (GWW)
:GWW

WW Grainger (GWW) AI Stock Analysis

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WW Grainger

(NYSE:GWW)

Rating:73Outperform
Price Target:
$1,172.00
▲(11.57%Upside)
Grainger's strong financial performance is a key positive, underpinning its solid stock score. Technical analysis suggests caution, with valuation metrics indicating potential overvaluation. The earnings call reaffirmed guidance but highlighted macroeconomic challenges.
Positive Factors
Business Model
GWW is seen as a 'port in the storm' due to its resilient business model, strong pricing power, and clean balance sheet.
Financial Performance
Shares are up 3% with first-quarter results as expected, indicating stability despite a 'muted' macro environment.
Negative Factors
Margins
Gross margins are expected to decline 70-80 basis points in the second quarter, influenced by customer show and non-repeating positive mix.
Tariffs
There is a tough set-up for Grainger with more risk to the FY25 outlook from tariffs and DOGE, threatening the 400-500bps of outgrowth LT target.

WW Grainger (GWW) vs. SPDR S&P 500 ETF (SPY)

WW Grainger Business Overview & Revenue Model

Company DescriptionW.W. Grainger, Inc. distributes maintenance, repair, and operating (MRO) products and services in the United States, Japan, Canada, the United Kingdom, and internationally. The company operates through two segments, High-Touch Solutions N.A. and Endless Assortment. It offers safety and security supplies, material handling and storage equipment, pumps and plumbing equipment, cleaning and maintenance supplies, and metalworking and hand tools. It also offers inventory management and technical support services. The company serves businesses, corporations, government entities, and other institutions through sales and service representatives, and electronic and ecommerce channels. W.W. Grainger, Inc. was founded in 1927 and is headquartered in Lake Forest, Illinois.
How the Company Makes MoneyW.W. Grainger generates revenue primarily through the sale of MRO products to businesses and institutions. The company's diversified product catalog includes over a million products sourced from thousands of suppliers. Grainger's key revenue streams include direct sales through its e-commerce platform and physical sales channels. The company also benefits from value-added services such as inventory management solutions and technical support, which enhance customer loyalty and drive repeat business. Strategic partnerships with suppliers and logistic providers, along with a robust supply chain infrastructure, contribute significantly to Grainger's ability to offer competitive pricing and maintain high service levels, thereby supporting its earnings.

WW Grainger Key Performance Indicators (KPIs)

Any
Any
Operating Earnings by Segment
Operating Earnings by Segment
Highlights the profitability of different business segments, providing insight into which areas are driving earnings and where there might be challenges or opportunities for growth.
Chart InsightsW.W. Grainger's High Touch Solutions segment shows fluctuating earnings with recent stabilization, but faces challenges with tariffs and SG&A costs. Despite a slight sales decline, operating margins remain robust. The Endless Assortment segment is a bright spot, with strong growth driven by MonotaRO and Zoro U.S., reflecting strategic success. The company maintains confidence in its 2025 guidance, supported by healthy cash flows and increased dividends, yet remains cautious due to macro uncertainties and market outgrowth challenges.
Data provided by:Main Street Data

WW Grainger Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 2.78%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed view with steady growth in sales and profitability, strong cash flows, and strategic increases in dividends. However, challenges with tariffs, weaker than expected performance in certain segments, and issues with SG&A costs and market outgrowth metrics present concerns. Despite these challenges, there is confidence in navigating the current environment.
Q1-2025 Updates
Positive Updates
Steady Revenue Growth
Total company reported sales for the quarter were up 1.7%, or 4.4% on a daily constant currency basis.
Healthy Operating Margins
Operating margins for the company remained healthy at 15.6%, with diluted EPS finishing the quarter at $9.86, up 2.5% compared to the prior year.
Strong Cash Flow and Shareholder Returns
Operating cash flow came in at $646 million, allowing a return of $380 million to shareholders through dividends and share repurchases. A 10% increase to the quarterly dividend was announced.
Endless Assortment Segment Growth
Sales increased 10.3%, or 15.3% on a daily constant currency basis, with Zoro U.S. up 18.4% and MonotaRO achieving 13.6% growth in local days, local currency.
Recognition for Company Culture
Grainger received several recognitions, including World's Most Admired Companies and Glassdoor's Best Places to Work.
Negative Updates
Challenges with Tariff Impacts
Tariffs imposed on imports, especially from China, have created a highly fluid and unpredictable environment, affecting sourcing and pricing strategies.
High-Touch Segment Softer Start
Sales in the High-Touch solution segment were down 0.2% on a reported basis, or up 1.9% on a daily constant currency basis, affected by weather, holiday timing, and government softness.
SG&A Deleverage
SG&A costs for the High-Touch segment increased, leading to an 80 basis points deleverage for the quarter.
Market Outgrowth Challenges
An internal model suggests MRO market volume actually declined in the low single digits during the first quarter, questioning the relevance of the quarterly outgrowth disclosure.
Company Guidance
During the W.W. Grainger First Quarter 2025 Earnings Call, the company reaffirmed its 2025 guidance despite the volatile environment. Total company reported sales for the quarter increased by 1.7% or 4.4% on a daily constant currency basis, with operating margins remaining healthy at 15.6%. Diluted EPS rose by 2.5% to $9.86, and operating cash flow was $646 million, allowing the company to return $380 million to shareholders through dividends and share repurchases. Additionally, Grainger announced a 10% increase in its quarterly dividend. The High-Touch Solutions segment experienced a slight decline in reported sales by 0.2%, but a 1.9% increase on a daily constant currency basis, with operating margins at 17.7%. Meanwhile, the Endless Assortment segment saw sales increase by 10.3% or 15.3% on a daily constant currency basis, with MonotaRO and Zoro U.S. contributing to an operating margin increase of 80 basis points to 8.7%. The company addressed the impact of tariffs, noting a modest initial pricing action with a targeted price-cost neutrality over time, and highlighted that the macro environment remains fluid, necessitating agility in navigating the uncertainties.

WW Grainger Financial Statement Overview

Summary
Grainger exhibits strong financial performance across all verticals. The company maintains solid revenue growth and profitability, supported by efficient use of equity and prudent cash management. While asset levels show some decline, the company's leverage is moderate, and cash flows remain strong, indicating a well-balanced financial position.
Income Statement
85
Very Positive
Grainger shows strong income statement performance with consistent revenue growth and healthy profitability margins. The Gross Profit Margin for TTM is 39.45%, with a Net Profit Margin of 11.08%. The EBIT and EBITDA margins are also robust at 15.31% and 16.46%, respectively. Revenue has grown steadily over the years, with a TTM growth rate of 4.17% compared to the previous annual report. This indicates a stable and profitable business trajectory.
Balance Sheet
78
Positive
Grainger demonstrates solid financial health with a Debt-to-Equity Ratio of 0.31, indicating moderate leverage. The Return on Equity (ROE) is impressive at 22.06% for TTM, showcasing efficient use of equity capital. The Equity Ratio stands at 100%, highlighting a strong equity base relative to assets. However, total assets have slightly decreased, which might need attention if it continues.
Cash Flow
80
Positive
Grainger's cash flow performance is commendable, with a stable Free Cash Flow supported by strong operating cash flows. The Free Cash Flow Growth Rate is slightly negative, but the Operating Cash Flow to Net Income Ratio of 1.10 for TTM signifies healthy cash generation relative to net income. The Free Cash Flow to Net Income Ratio is also robust at 0.81, indicating good cash conversion.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue17.24B17.17B16.48B15.23B13.02B11.80B
Gross Profit6.80B6.76B6.50B5.85B4.72B4.24B
EBITDA2.84B2.90B2.81B2.40B1.74B1.22B
Net Income1.91B1.91B1.83B1.55B1.04B695.00M
Balance Sheet
Total Assets8.66B8.83B8.15B7.59B6.59B6.29B
Cash, Cash Equivalents and Short-Term Investments666.00M1.04B660.00M325.00M241.00M585.00M
Total Debt2.68B3.18B2.75B2.71B2.76B2.40B
Total Liabilities4.81B5.13B4.71B4.85B4.43B4.20B
Stockholders Equity3.48B3.36B3.12B2.73B2.16B2.09B
Cash Flow
Free Cash Flow1.55B1.57B1.59B1.08B682.00M926.00M
Operating Cash Flow2.10B2.11B2.03B1.33B937.00M1.12B
Investing Cash Flow-527.00M-520.00M-422.00M-263.00M-226.00M-179.00M
Financing Cash Flow-1.69B-1.18B-1.28B-972.00M-1.04B-726.00M

WW Grainger Technical Analysis

Technical Analysis Sentiment
Positive
Last Price1050.49
Price Trends
50DMA
1057.74
Negative
100DMA
1023.75
Positive
200DMA
1061.87
Negative
Market Momentum
MACD
-6.95
Positive
RSI
49.74
Neutral
STOCH
73.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GWW, the sentiment is Positive. The current price of 1050.49 is below the 20-day moving average (MA) of 1054.55, below the 50-day MA of 1057.74, and below the 200-day MA of 1061.87, indicating a bearish trend. The MACD of -6.95 indicates Positive momentum. The RSI at 49.74 is Neutral, neither overbought nor oversold. The STOCH value of 73.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GWW.

WW Grainger Risk Analysis

WW Grainger disclosed 24 risk factors in its most recent earnings report. WW Grainger reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

WW Grainger Peers Comparison

Overall Rating
UnderperformOutperform
Sector (58)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
77
Outperform
$49.48B43.0332.35%4.08%3.08%-0.76%
76
Outperform
£44.03B27.8829.28%1.49%2.32%-12.51%
AIAIT
75
Outperform
$9.36B24.6522.23%0.75%0.50%4.48%
WCWCC
73
Outperform
$9.48B14.7014.38%0.93%-1.80%9.55%
GWGWW
73
Outperform
$50.46B26.8257.19%0.86%3.71%7.23%
MSMSM
72
Outperform
$5.01B25.3814.34%3.78%-4.11%-31.26%
58
Neutral
$1.34B4.24-2.93%7.38%3.67%-51.13%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GWW
WW Grainger
1,050.49
140.43
15.43%
AIT
Applied Industrial Technologies
245.74
58.37
31.15%
FAST
Fastenal Company
43.13
12.40
40.35%
MSM
MSC Industrial
89.97
15.93
21.52%
WCC
Wesco International
194.29
39.23
25.30%
FERG
Ferguson PLC
223.32
35.99
19.21%

WW Grainger Corporate Events

Shareholder MeetingsBusiness Operations and Strategy
WW Grainger Amends Articles, Alters Governance Structure
Neutral
May 15, 2025

On April 30, 2025, W.W. Grainger, Inc. held its annual meeting of shareholders where a proposal to amend the company’s Restated Articles of Incorporation to eliminate cumulative voting was approved. This amendment, effective May 9, 2025, led to changes in the company’s by-laws to reflect the elimination of cumulative voting, impacting the company’s governance structure.

The most recent analyst rating on (GWW) stock is a Buy with a $1125.00 price target. To see the full list of analyst forecasts on WW Grainger stock, see the GWW Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Jul 05, 2025