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
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