top of page
Search

GWW Update: Still compelling

  • Writer: Abacus Research
    Abacus Research
  • Jun 19, 2018
  • 1 min read

Grainger is not being disrupted by Amazon, or the internet. Yes, 2017 was challenging, but the business has undergone a reset, and is now well positioned to outperform.

Today, GWW is a lowly valued, high quality company, with a solid tailwind and plenty internal change which will lead to very solid operating leverage. 

  • We expect sustainable volume growth after the repricing in 2017 will surprise to the upside

  • Years of challenging market conditions has ended

  • 2019: we think the street is plain wrong at $16.70 EPS. We estimate that numbers have very little downside and 2019 EPS could be $19.30 

  • Extremely bearish analysts (3/22 Buy ratings) will be forced to upgrade over the coming 12 months. 

Potential Upside: $390 (+25%): Based on 20x P/E on upside 2019 ests.

Sensible Downside: $280(-10%): Difficult to be more bearish than the street

 
 
 

Recent Posts

See All
Brookfield (BN):

We initially wrote up BN in Jan 2024, it has increased 70%, so why mention it again? Firstly, we think the fundamentals are as good now as they were 2 yrs ago, with a >15% IRR on offer. BN is not a we

 
 
 
Figure (FIGR)

We believe Figure is highly disruptive. If tokenisation of real-world assets is a theme for the next decade, FIGR could be at the centre of it. Figure has found a real-world use for blockchain, provin

 
 
 

Comments

bottom of page