Grainger (GRI) AI Stock Analysis

• Market Cap: £1.51B
• Dividend Yield: 3.67%
• Average Volume (3M): 1.59M
• Price to Earnings (P/E): 48.3
• Beta (1Y): 1.45
• Revenue Growth: 6.29%
• EPS Growth: 21.16%
• Country: UK
• Employees: 367
• Sector: Real Estate
• Sector Strength: 74
• Industry: Real Estate - Services
• EPS (TTM): 0.04
• Shares Outstanding: 741,609,000
• 10 Day Avg. Volume: 1,511,832
• 30 Day Avg. Volume: 1,590,676
• PEG Ratio: 2.28
• Price to Book (P/B): N/A
• Price to Sales (P/S): 12.99
• Price to Cash Flow (P/CF): 21.80
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: 283.25p
• Price Target Upside: 37.50% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

Grainger's stock score reflects strong financial performance and strategic initiatives that enhance market positioning. However, high leverage and a bearish technical outlook present risks. The valuation suggests overvaluation, offset by positive corporate events and moderate dividend yield.

Grainger Business Overview & Revenue Model

Company Description

Grainger (GRI) is a leading industrial supply company that operates primarily in the business-to-business sector. It specializes in providing maintenance, repair, and operating (MRO) products and services to a wide range of industries, including manufacturing, government, and commercial sectors. The company's extensive product offering includes everything from safety and security supplies to electrical, plumbing, and material handling equipment. Grainger is committed to helping businesses maintain efficient operations through its vast inventory and expert solutions.

How the Company Makes Money

Grainger makes money primarily through the sale of its extensive inventory of MRO products and solutions, which are essential for the day-to-day operations of its industrial and commercial customers. Revenue is generated from direct sales to businesses, government entities, and other organizations. A significant portion of its income is derived from its e-commerce platform, which provides a convenient and efficient purchasing process for customers. Additionally, Grainger benefits from strategic partnerships with suppliers and manufacturers, allowing it to offer competitive pricing and a reliable supply chain. The company also invests in value-added services, such as inventory management and technical support, to enhance customer loyalty and drive repeat business.

Grainger Financial Statement Overview

Summary

Grainger shows strong revenue growth and operational efficiency, but high leverage and declining free cash flow pose financial risks.

Income Statement

Grainger exhibited steady revenue growth with a 4.7% increase over the past year. The Gross Profit Margin was solid at approximately 57%, indicating strong cost management. However, the Net Profit Margin decreased slightly to 10.96%, reflecting a decline in net income relative to revenue. EBIT and EBITDA margins remained robust at 41.84% and 28.25%, respectively, demonstrating effective operational efficiency.

Balance Sheet

The debt-to-equity ratio is relatively high at 0.84, indicating significant leverage, which could pose financial risks. Return on Equity (ROE) stands at a moderate 1.65%, suggesting efficient use of equity. The equity ratio of 50.60% showcases a balanced capital structure, providing some financial stability.

Cash Flow

The Free Cash Flow decreased by 25.9% year-over-year, potentially impacting investment capacity. The Operating Cash Flow to Net Income ratio is strong, reflecting good cash generation relative to net income. However, the Free Cash Flow to Net Income ratio shows a slight weakening, indicating less free cash flow available relative to net income.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
274.20M	284.60M	271.70M	285.20M	256.10M	219.20M
	Gross Profit
164.50M	162.10M	160.90M	161.10M	151.50M	147.90M
	EBIT
128.90M	119.10M	125.20M	120.50M	112.30M	104.40M
	EBITDA
130.20M	80.40M	126.30M	121.40M	113.50M	105.60M
	Net Income Common Stockholders
-1.10M	31.20M	25.60M	229.40M	109.50M	82.80M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
141.00M	93.20M	121.00M	110.20M	317.60M	369.10M
	Total Assets
2.51B	3.74B	3.72B	3.58B	3.27B	2.97B
	Total Debt
1.21B	1.60B	1.54B	1.36B	1.35B	1.39B
	Net Debt
1.07B	1.51B	1.41B	1.25B	1.03B	1.02B
	Total Liabilities
1.33B	1.85B	1.79B	1.61B	1.53B	1.53B
	Stockholders Equity
1.18B	1.89B	1.93B	1.97B	1.74B	1.44B
Cash Flow		Free Cash Flow
155.30M	132.30M	178.60M	98.30M	147.70M	80.80M
	Operating Cash Flow
164.50M	136.60M	184.70M	102.00M	148.00M	81.10M
	Investing Cash Flow
-194.70M	-167.70M	-274.10M	-274.20M	-315.90M	-161.30M
	Financing Cash Flow
25.50M	3.30M	114.50M	-49.50M	116.40M	260.00M

Grainger Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 206.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:GRI, the sentiment is Neutral. The current price of 206 is above the 20-day moving average (MA) of 203.63, below the 50-day MA of 207.85, and below the 200-day MA of 224.12, indicating a neutral trend. The MACD of -1.01 indicates Negative momentum. The RSI at 48.32 is Neutral, neither overbought nor oversold. The STOCH value of 47.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for GB:GRI.

Grainger Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BKG	71 Outperform	£3.61B	10.00	11.03%	1.83%	0.39%	-17.64%
PSN	69 Neutral	£3.87B	14.46	7.71%	4.93%	15.42%	4.45%
GRI	65 Neutral	£1.51B	48.35	1.63%	3.67%	6.29%	21.16%
Sector *	61 Neutral	$4.72B	17.64	-3.07%	10.89%	5.99%	-21.86%
CRST	54 Neutral	£419.76M	―	-13.06%	1.34%	-5.98%	-677.54%

Grainger Corporate Events

Grainger’s Emissions Reduction Targets Approved by SBTi

Grainger plc has received approval from the Science Based Targets initiative (SBTi) for its ambitious greenhouse gas emissions reduction targets, reinforcing its commitment to sustainability. By 2030, Grainger aims to cut its absolute scope 1 and 2 emissions by 42% and reduce scope 3 emissions by 51.6% per square meter of residential area. The company has already achieved an 8% reduction in emissions between FY23 and FY24, and 95% of its properties are rated EPC A-C, highlighting its dedication to energy efficiency and cost savings for customers.

Grainger Director Acquires Shares Through SAYE Scheme

Grainger plc announced that Michael Keaveney, Director of Land & Development, has acquired 15,544 shares through the company’s Save as You Earn (SAYE) Scheme. This transaction reflects the company’s ongoing commitment to employee investment and engagement, potentially strengthening internal stakeholder alignment and confidence in the company’s growth trajectory.

Grainger plc Boosts Employee Engagement with Share Incentive Plan Transactions

Grainger plc has announced the execution of transactions related to its Share Incentive Plan (SIP) dated February 3, 2025, which allows employees to purchase ordinary shares and receive matching shares at no additional cost. The SIP, an all-employee trust arrangement approved by HMRC, saw the acquisition of 4,767 partnership shares and the allocation of 4,215 matching shares to participating employees, including the company’s directors. This initiative underscores Grainger’s commitment to employee involvement and aligns managerial interests with shareholder value, potentially enhancing company performance and stakeholder confidence.

Grainger plc Successfully Passes All AGM Resolutions

Grainger plc, at its 112th Annual General Meeting, announced that all resolutions proposed were passed by shareholders. The meeting saw a significant shareholder engagement, with 83.13% of ordinary shares being voted. Key resolutions included the approval of the directors’ report and financial statements, director re-elections, and the reappointment of KPMG LLP as auditors. The outcomes reflect strong shareholder support for the company’s governance and operational strategies.

Grainger plc Announces Strong Rental Income Growth Amid Strategic Expansion

Grainger plc reported a robust 15% growth in total net rental income for the first four months of 2025, driven by strong demand and high occupancy rates in its private rental sector portfolio. The company’s commitment to transforming into a total returns-focused investment business is supported by its strategic asset recycling and a favorable regulatory environment, positioning Grainger for continued earnings growth and market expansion.

Grainger plc Recognized for Sustainability Leadership with Inclusion in DJSI for Europe

Grainger plc, the UK’s largest listed residential landlord, has been added to the Dow Jones Sustainability Indices (DJSI) for Europe for 2025, highlighting its leadership in environmental, social, and governance (ESG) practices. This inclusion reflects Grainger’s commitment to sustainability and responsible business operations, enhancing its reputation as one of only four European real estate companies to meet the stringent ESG criteria of the DJSI. The recognition is expected to reinforce Grainger’s market position and positively impact stakeholders by furthering its sustainability goals, including achieving net zero carbon operations.

Grainger plc Gains New Research Coverage Amidst Strategic Transformation

Progressive Equity Research has initiated coverage on Grainger plc, offering UK investors insights into the company as it reaches a critical point in its strategy to focus on build-to-rent properties. With government support for the private rental market and the planned conversion to a REIT, Grainger is well-positioned to attract investors seeking scalable income and capital growth opportunities.

Grainger Executives Exercise Share Options, Adjust Holdings

Grainger plc announced that its Group CEO, Helen Gordon, and PDMR, Eliza Patterson, executed options under the company’s Deferred Bonus Share Plan, resulting in the sale of ordinary shares. The sales, conducted to cover tax and NIC liabilities, reflect significant shareholding adjustments for both executives, with transactions processed between January 10 and 15, 2025, at an average price of £2.153. The transactions underscore Grainger’s commitment to transparent managerial practices, potentially impacting investor confidence and the company’s market perception.

Grainger plc Enhances Employee Involvement Through Share Incentive Plan

Grainger plc has announced the transactions related to its Share Incentive Plan (SIP), a program that allows employees to purchase ordinary shares using salary deductions and receive matching shares at no cost. The recent transaction involved acquiring 4,546 partnership shares and allocating 3,911 matching shares to participating employees, including key directors and managerial staff. This initiative reflects Grainger’s commitment to employee investment and involvement, potentially strengthening stakeholder alignment with company goals and enhancing employee retention and motivation.