Cautious Optimism for MSC Industrial: Hold Rating Maintained Amid Turnaround Efforts and Leadership TransitionWe have cautious optimism on MSC’s turnaround story and would like to see another quarter or two of accelerating sales and improving incremental margins. A return to outgrowth of 400 basis points above IP would turn us into buyers. Meeting (or beating) first-quarter guidance for 4% sales growth is a key next step. We see prospects for further supplier price increases, particularly for tungsten carbides. For now, we maintain our Market Perform rating with end-markets broadly flat. CEO transition. MSC announced that current President and COO Martina McIsaac will be stepping into the CEO role on January 1, 2026. Current CEO Erik Gershwind will remain with the company as vice chair of the board of directors. This transition has been widely telegraphed, and we see the sharper focus on salesforce productivity and lowering the cost to serve as big positives.