William Blair analyst Ryan Merkel has maintained their bullish stance on GWW stock, giving a Buy rating yesterday.
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Ryan Merkel has given his Buy rating due to a combination of factors, including the temporary nature of the gross margin pressures WW Grainger is currently facing. The decline in gross margins is primarily attributed to the LIFO accounting mechanics, which are expected to reverse and become beneficial by 2026. This anticipated shift will likely position Grainger’s gross margins more favorably compared to its peers who use FIFO accounting.
Additionally, Merkel believes in the long-term potential of Grainger due to its scale, service, and technological advantages. Despite the recent stock price decline, he suggests that the current dip presents a buying opportunity for long-term investors. The stock’s reaction is partly due to investor dissatisfaction with management’s handling of the LIFO risk, but Merkel remains confident in the company’s overall strategic positioning.
Merkel covers the Industrials sector, focusing on stocks such as Fastenal Company, SiteOne Landscape Supply, and Aaon. According to TipRanks, Merkel has an average return of 9.2% and a 62.50% success rate on recommended stocks.
In another report released yesterday, TR | OpenAI – 4o also reiterated a Buy rating on the stock with a $1,165.00 price target.