WW Grainger (GWW) AI Stock Analysis

• Market Cap: $50.19B
• Dividend Yield: 0.8%
• Average Volume (3M): 295.84K
• Price to Earnings (P/E): 26.7
• Beta (1Y): 0.83
• Revenue Growth: 3.71%
• EPS Growth: 7.23%
• Country: US
• Employees: 23,500
• Sector: Industrials
• Sector Strength: 94
• Industry: Industrial - Distribution
• EPS (TTM): 9.86
• Shares Outstanding: 48,039,210
• 10 Day Avg. Volume: 409,379
• 30 Day Avg. Volume: 295,838
• PEG Ratio: 64.49
• Price to Book (P/B): 14.52
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 32.50
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 0.76
• Enterprise Value/Gross Profit: 7.64
• Enterprise Value/Ebitda: 4.58
• 1Y Price Target: $1,114.20
• Price Target Upside: 5.89% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 7

• Rating: 73 Outperform
• Price Target: $1,165.00 ▲(10.72%Upside)

Grainger's overall stock score is driven by strong financial performance with consistent revenue growth and solid profitability. However, technical indicators show neutral momentum, and valuation suggests potential overvaluation with a modest dividend yield. The recent earnings call highlighted steady sales growth and strong cash flows, despite challenges with tariffs and certain segments. These factors combined contribute to a balanced but cautious outlook.

Positive Factors

Business Model

GWW is viewed as a 'port in the storm' with its resilient business model, strong price power, and clean balance sheet.

Sales Growth

Second-quarter organic daily sales are guided up 5%, matching analyst expectations.

Negative Factors

Margin Pressure

Gross margins are expected to decline 70-80 basis points sequentially due to customer show, non-repeating positive mix, and typical seasonality.

Tariff Risks

There is a tough set-up for Grainger with more risk to the FY25 outlook from tariffs and DOGE.

Valuation Concerns

Valuation has fallen to a more comfortable position vs. peers, but remains extended at approximately 24x NTM P/E vs. a 20x 5Y median, indicating potential downside risk.

WW Grainger Business Overview & Revenue Model

Company Description

W.W. Grainger, Inc. is a leading industrial supply company in North America, serving businesses across various sectors including manufacturing, healthcare, government, and commercial. The company provides a vast range of maintenance, repair, and operating (MRO) products such as safety equipment, tools, and materials handling products. Grainger operates through a network of branches, distribution centers, and an extensive online platform, ensuring efficient delivery of essential products to its customers.

How the Company Makes Money

W.W. Grainger generates revenue primarily through the sale of MRO products to businesses and institutions. The company's diversified product catalog includes over a million products sourced from thousands of suppliers. Grainger's key revenue streams include direct sales through its e-commerce platform and physical sales channels. The company also benefits from value-added services such as inventory management solutions and technical support, which enhance customer loyalty and drive repeat business. Strategic partnerships with suppliers and logistic providers, along with a robust supply chain infrastructure, contribute significantly to Grainger's ability to offer competitive pricing and maintain high service levels, thereby supporting its earnings.

WW Grainger Financial Statement Overview

Summary

Grainger exhibits robust financial performance with strong revenue growth, profitability, and efficient use of equity. Despite a slight decline in asset levels, cash flows remain solid, highlighting a well-balanced financial position.

Income Statement

Grainger shows strong income statement performance with consistent revenue growth and healthy profitability margins. The Gross Profit Margin for TTM is 39.45%, with a Net Profit Margin of 11.08%. The EBIT and EBITDA margins are also robust at 15.31% and 16.46%, respectively. Revenue has grown steadily over the years, with a TTM growth rate of 4.17% compared to the previous annual report. This indicates a stable and profitable business trajectory.

Balance Sheet

Grainger demonstrates solid financial health with a Debt-to-Equity Ratio of 0.31, indicating moderate leverage. The Return on Equity (ROE) is impressive at 22.06% for TTM, showcasing efficient use of equity capital. The Equity Ratio stands at 100%, highlighting a strong equity base relative to assets. However, total assets have slightly decreased, which might need attention if it continues.

Cash Flow

Grainger's cash flow performance is commendable, with a stable Free Cash Flow supported by strong operating cash flows. The Free Cash Flow Growth Rate is slightly negative, but the Operating Cash Flow to Net Income Ratio of 1.10 for TTM signifies healthy cash generation relative to net income. The Free Cash Flow to Net Income Ratio is also robust at 0.81, indicating good cash conversion.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	17.17B	16.48B	15.23B	13.02B	11.80B
Gross Profit	6.76B	6.50B	5.85B	4.72B	4.24B
EBITDA	2.90B	2.81B	2.40B	1.74B	1.22B
Net Income	1.91B	1.83B	1.55B	1.04B	695.00M
Balance Sheet
Total Assets	8.83B	8.15B	7.59B	6.59B	6.29B
Cash, Cash Equivalents and Short-Term Investments	1.04B	660.00M	325.00M	241.00M	585.00M
Total Debt	3.18B	2.75B	2.71B	2.76B	2.40B
Total Liabilities	5.13B	4.71B	4.85B	4.43B	4.20B
Stockholders Equity	3.36B	3.12B	2.73B	2.16B	2.09B
Cash Flow
Free Cash Flow	1.57B	1.59B	1.08B	682.00M	926.00M
Operating Cash Flow	2.11B	2.03B	1.33B	937.00M	1.12B
Investing Cash Flow	-520.00M	-422.00M	-263.00M	-226.00M	-179.00M
Financing Cash Flow	-1.18B	-1.28B	-972.00M	-1.04B	-726.00M

WW Grainger Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 1052.21
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GWW, the sentiment is Positive. The current price of 1052.21 is above the 20-day moving average (MA) of 1039.35, below the 50-day MA of 1059.68, and below the 200-day MA of 1062.93, indicating a neutral trend. The MACD of -3.57 indicates Negative momentum. The RSI at 53.35 is Neutral, neither overbought nor oversold. The STOCH value of 50.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GWW.

WW Grainger Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FAST	79 Outperform	$55.01B	45.84	32.57%	2.99%	4.84%	2.98%
FERG	76 Outperform	£44.90B	28.43	29.28%	1.47%	2.32%	-12.51%
MSM	74 Outperform	$4.85B	24.71	14.34%	3.91%	-4.11%	-31.26%
WCC	73 Outperform	$10.33B	16.08	14.38%	0.82%	-1.80%	9.55%
GWW	73 Outperform	$50.19B	26.68	57.19%	0.80%	3.71%	7.23%
AIT	73 Outperform	$10.21B	26.78	22.23%	0.62%	0.50%	4.48%
Sector *	65 Neutral	$11.06B	15.73	5.16%	1.93%	3.12%	-25.59%

WW Grainger Corporate Events

WW Grainger Amends Articles, Alters Governance Structure

On April 30, 2025, W.W. Grainger, Inc. held its annual meeting of shareholders where a proposal to amend the company’s Restated Articles of Incorporation to eliminate cumulative voting was approved. This amendment, effective May 9, 2025, led to changes in the company’s by-laws to reflect the elimination of cumulative voting, impacting the company’s governance structure.

The most recent analyst rating on (GWW) stock is a Buy with a $1125.00 price target. To see the full list of analyst forecasts on WW Grainger stock, see the GWW Stock Forecast page.