Analyst Note| Dawit Woldemariam |
We raised our fair value estimate slightly to $444 from $441 previously, after tweaking our near-term sales and margin expectations for Grainger. The company posted another strong quarter, growing sales to $3.9 billion, which was up 16.9% year on year. Both of Grainger’s segments posted solid growth, with high-touch solutions increasing 19.4% year on year, while endless assortment rose 8.6% year on year. The company’s results showed demand across its end markets remains solid, despite increasing uncertainty around global economic growth. This theme was also present across the other large industrial distributors that have reported this earnings cycle. Consumer-related markets are starting to slow, but industrial and manufacturing end markets are still performing quite well.