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MSC Industrial
(NYSE:MSM)
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Rating:66Neutral
Price Target:
$121.00
▲(2.26% Upside)
Action:Reiterated
Date:10/23/26
MSM scores in the mid-range primarily due to sound but cooling financial performance (margin erosion and cash-flow variability) balanced by a strong, upbeat earnings outlook and solid operational execution. Technicals are a headwind with the stock below key short/intermediate moving averages, and valuation is a constraint given the high P/E despite a reasonable dividend yield.
Positive Factors
Core Customer and Program Growth
Strong growth among core customers, vending users, and In-Plant Program accounts indicates deeper penetration of MSC’s existing platform. These higher-touch relationships can support recurring replenishment, increase customer share of wallet, and make the business more resilient over the next several quarters.
Negative Factors
Sustained Margin Compression
The decline in net margin shows that MSC’s earnings conversion has weakened materially from earlier levels, even though the company remains profitable. Persistently lower profitability would reduce operating leverage, constrain reinvestment capacity, and make future earnings more sensitive to demand or cost pressure.
Read all positive and negative factors
Positive Factors
Negative Factors
Core Customer and Program Growth
Strong growth among core customers, vending users, and In-Plant Program accounts indicates deeper penetration of MSC’s existing platform. These higher-touch relationships can support recurring replenishment, increase customer share of wallet, and make the business more resilient over the next several quarters.
Read all positive factors
MSC Industrial Key Performance Indicators (KPIs)
Any
Net Sales by Geography
Shows how much revenue comes from Macau versus Mainland China and other regions, revealing reliance on Macau tourism and exposure to China travel trends and local regulations. A concentration in one geography increases sensitivity to regional shocks, while broader geographic mix points to diversification and more stable growth prospects.
Shows how much revenue comes from Macau versus Mainland China and other regions, revealing reliance on Macau tourism and exposure to China travel trends and local regulations. A concentration in one geography increases sensitivity to regional shocks, while broader geographic mix points to diversification and more stable growth prospects.
Data provided by:
The Fly
The FlyMSC Industrial (MSM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.42B
Dividend Yield2.62%
Average Volume (3M)787.97K
Price to Earnings (P/E)32.1
Beta (1Y)0.79
Revenue Growth4.41%
EPS Growth16.62%
CountryUS
Employees7,181
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)4.14
Shares Outstanding55,846,300
10 Day Avg. Volume786,062
30 Day Avg. Volume787,971
Financial Highlights & Ratios
PEG Ratio2.54
Price to Book (P/B)4.67
Price to Sales (P/S)1.66
P/FCF Ratio21.71
Enterprise Value/Market Cap0.96
Enterprise Value/Revenue1.83
Enterprise Value/Gross Profit4.48
Enterprise Value/Ebitda16.56
Forecast
1Y Price Target
$137.40Price Target Upside16.12% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)5.56
Revenue Forecast (FY)$4.29B
MSC Industrial Business Overview & Revenue Model
Company Description
MSC Industrial Direct Co., Inc., along with its affiliated entities, specializes in the distribution of industrial supplies, primarily focusing on metalworking, maintenance, repair, and operations (MRO) products and services. Its market reach span...
How the Company Makes Money
MSC primarily makes money by selling industrial and metalworking/MRO products to business customers, generating revenue from the margin between its procurement cost from manufacturers/suppliers and the price charged to customers. Key revenue strea...
MSC Industrial Earnings Call Summary
Earnings Call Date:Oct 22, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Jan 13, 2027
Earnings Call Sentiment Positive
The call was predominantly positive, with record fourth-quarter sales, improving volumes, adjusted margin expansion, strong cash generation, better sales-force productivity, and a constructive fiscal first-quarter sales outlook. These positives were partly offset by the $42 million Digital Core impairment, lower reported operating margin and GAAP EPS, ongoing inflation and price-cost timing pressure, and a modest public-sector decline.Positive Updates
Record Fiscal Fourth-Quarter Sales and Strong Growth
Fiscal fourth-quarter sales were approximately $1.1 billion, growing 8.6% year-over-year on an average daily sales basis, driven by 6.9% price and 1.6% improving volume. Sequentially, average daily sales improved approximately 3% and outperformed historical third-quarter to fourth-quarter averages.
Negative Updates
Digital Core Program Discontinued and Impairment Recorded
MSC discontinued its previous Digital Core technology program and recorded an approximately $42 million non-cash asset impairment charge. The impairment reduced fourth-quarter reported operating margin by 390 basis points and reduced GAAP EPS by $0.56.
Read all updates
Q4-2026 Updates
Positive
Negative
Record Fiscal Fourth-Quarter Sales and Strong Growth
Fiscal fourth-quarter sales were approximately $1.1 billion, growing 8.6% year-over-year on an average daily sales basis, driven by 6.9% price and 1.6% improving volume. Sequentially, average daily sales improved approximately 3% and outperformed historical third-quarter to fourth-quarter averages.
Read all positive updates
Company Guidance
For fiscal 2027 first quarter, MSC expects average daily sales to grow 9.5% to 10.5% compared to last year, with sales up 9.5% in September, growth of approximately 11.5% in October and 9% in November, and adjusted operating margin between 9.5% and 10.1%; gross margins are expected to slightly underperform the typical fourth to first quarter sequential decline of about 10 basis points, adjusted OpEx is expected to show a slight sequential increase, price is expected to be in the 7% range, and volumes are expected to continue to see slightly improving quarter-over-quarter trends. For the full fiscal year, depreciation and amortization expense is expected to be $100 million-$105 million, interest and other expense $40 million-$45 million, capital expenditures $90 million-$100 million, the effective tax rate 24.5%-25.5%, and free cash flow 80%-90% of net income; the company said the framework of 20%-30% for incremental margins makes a lot of sense, its goal is to remain neutral on price cost, its overall gross margin goal is to stay in that 40%-41%. Percent range, and mid-single digits pricing does not seem too crazy, with probably 3%-4% carryover impact for the full year.MSC Industrial Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
74
Positive
Cash Flow
63
Positive
| Breakdown | TTM | Aug 2026 | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.91B | 4.01B | 3.77B | 3.82B | 4.01B | 3.69B |
| Gross Profit | 1.60B | 1.64B | 1.54B | 1.57B | 1.64B | 1.56B |
| EBITDA | 431.81M | 415.15M | 377.82M | 451.03M | 553.43M | 555.87M |
| Net Income | 230.54M | 222.59M | 199.33M | 258.59M | 343.23M | 339.79M |
Balance Sheet | ||||||
| Total Assets | 2.50B | 2.51B | 2.46B | 2.46B | 2.54B | 2.73B |
| Cash, Cash Equivalents and Short-Term Investments | 74.09M | 65.03M | 56.23M | 29.59M | 50.05M | 43.54M |
| Total Debt | 555.42M | 528.19M | 538.81M | 568.17M | 521.42M | 860.77M |
| Total Liabilities | 1.08B | 1.08B | 1.07B | 1.06B | 1.05B | 1.37B |
| Stockholders Equity | 1.42B | 1.43B | 1.39B | 1.39B | 1.48B | 1.35B |
Cash Flow | ||||||
| Free Cash Flow | 219.93M | 306.50M | 240.88M | 311.29M | 607.09M | 184.81M |
| Operating Cash Flow | 305.79M | 306.50M | 333.72M | 410.70M | 699.58M | 246.18M |
| Investing Cash Flow | -85.04M | -80.53M | -63.29M | -123.40M | -112.67M | -94.49M |
| Financing Cash Flow | -218.25M | -217.08M | -243.57M | -307.35M | -580.40M | -148.14M |
MSC Industrial Technical Analysis
Negative
118.33
Price Trends
123.45
Negative
121.90
Negative
107.59
Positive
Market Momentum
0.71
Positive
31.10
Neutral
39.99
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MSM, the sentiment is Negative. The current price of 118.33 is below the 20-day moving average (MA) of 127.85, below the 50-day MA of 123.45, and above the 200-day MA of 107.59, indicating a neutral trend. The MACD of 0.71 indicates Positive momentum. The RSI at 31.10 is Neutral, neither overbought nor oversold. The STOCH value of 39.99 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for MSM.
MSC Industrial Risk Analysis
MSC Industrial disclosed 31 risk factors in its most recent earnings report. MSC Industrial 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
MSC Industrial Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $2.75B | 29.74 | 18.27% | ― | 11.47% | 8.43% | |
78 Outperform | $59.26B | 42.33 | 35.13% | 1.83% | 13.53% | 15.58% | |
78 Outperform | $62.92B | 34.45 | 48.70% | 0.70% | 7.80% | -0.65% | |
76 Outperform | $12.45B | 30.56 | 22.17% | 0.59% | 8.84% | 8.10% | |
75 Outperform | $1.71B | 20.04 | 26.97% | 2.45% | 8.43% | 29.47% | |
66 Neutral | $7.42B | 32.08 | 15.87% | 2.62% | 4.41% | 16.62% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
MSM
MSC Industrial
112.43
25.97
30.03%
AIT
Applied Industrial Technologies
319.40
61.14
23.67%
DXPE
DXP Enterprises
157.66
40.49
34.56%
FAST
Fastenal Company
52.73
10.65
25.32%
GIC
Global Industrial Company
44.91
11.12
32.92%
GWW
WW Grainger
1,360.08
403.91
42.24%
MSC Industrial Corporate Events
Business Operations and StrategyDividends
MSC Industrial boosts quarterly dividend, signals confidence
Positive
Oct 14, 2026
On October 14, 2026, MSC Industrial Supply Co. announced that its Board of Directors had declared a regular quarterly cash dividend of $0.89 per share, up from the prior $0.87 per share. The new dividend, representing an increase of roughly 2.3 pe...
Business Operations and StrategyExecutive/Board Changes
MSC Industrial appoints new chief financial officer
Positive
Sep 8, 2026
On September 8, 2026, MSC Industrial Supply Co. announced the appointment of Rob Kuhns as Executive Vice President and Chief Financial Officer, with Kuhns to be based at the company’s Davidson, N.C. corporate office. Kuhns brings more than t...
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.