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MSC Industrial
(NYSE:MSM)
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Rating:72Outperform
Price Target:
$136.00
▲(39.46% Upside)
Action:Upgraded
Date:07/03/26
MSM scores well overall driven by strong technical momentum and a constructive earnings update featuring improved margins, cost progress, and raised free-cash-flow conversion guidance. The main offsets are normalized (lower) profitability versus prior peaks and a relatively high P/E multiple for a business still showing modest volume recovery and some cash flow volatility.
Positive Factors
Recurring MRO consumables & in‑plant scale
MSC’s multi‑channel model and expanding vending/in‑plant footprint create durable recurring revenue from high‑frequency consumables. Vending and in‑plant sales (~20%+ of net sales) boost share of wallet, lock in customers, and generate predictable reorder streams that support steady demand even if broader manufacturing volumes fluctuate.
Negative Factors
Revenue driven mainly by price, not volume
A large share of recent sales gains came from price increases rather than sustainable volume growth. If supplier inflation eases, competitive pressure rises, or customers push back, topline and margin trends could reverse. Durable revenue expansion depends on achieving consistent volume recovery, which remains modest.
Read all positive and negative factors
Positive Factors
Negative Factors
Recurring MRO consumables & in‑plant scale
MSC’s multi‑channel model and expanding vending/in‑plant footprint create durable recurring revenue from high‑frequency consumables. Vending and in‑plant sales (~20%+ of net sales) boost share of wallet, lock in customers, and generate predictable reorder streams that support steady demand even if broader manufacturing volumes fluctuate.
Read all positive factors
MSC Industrial (MSM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.86B
Dividend Yield3.96%
Average Volume (3M)745.28K
Price to Earnings (P/E)29.7
Beta (1Y)0.80
Revenue Growth4.41%
EPS Growth16.62%
CountryUS
Employees7,191
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)4.14
Shares Outstanding55,846,300
10 Day Avg. Volume764,392
30 Day Avg. Volume745,277
Financial Highlights & Ratios
PEG Ratio-1.13
Price to Book (P/B)3.63
Price to Sales (P/S)1.34
P/FCF Ratio20.89
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue1.78
Enterprise Value/Gross Profit4.35
Enterprise Value/Ebitda17.11
Forecast
1Y Price Target
$148.50Price Target Upside52.28% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)4.37
Revenue Forecast (FY)$3.96B
MSC Industrial Business Overview & Revenue Model
Company Description
MSC Industrial Direct Co., Inc., along with its affiliated entities, specializes in the distribution of industrial supplies, primarily focusing on metalworking, maintenance, repair, and operations (MRO) products and services. Its market reach span...
How the Company Makes Money
MSC primarily makes money by purchasing industrial and metalworking products from manufacturers and reselling them to business customers at a markup, generating revenue from product sales across its metalworking and MRO assortments. A significant ...
MSC Industrial Earnings Call Summary
Earnings Call Date:Jul 01, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call conveyed constructive operational progress: sales and margins beat expectations, EPS improved materially, vending/in-plant expansion accelerated, and cost-reduction initiatives are producing tangible benefits (lower opex as a percent of sales, headcount reductions, and network savings). However, the improvement is still largely price-driven with volumes only modestly recovering, persistent commodity inflation (notably tungsten), and some timing-related headwinds (freight lapsing, D&A increase, isolated bad debt). Management is optimistic and laying out a clear productivity roadmap, but additional work (including further productivity/headcount actions and sustainable volume growth) is required to reach mid-teens operating margins.Positive Updates
Revenue and Average Daily Sales Growth
Fiscal 3Q sales of $1.047 billion, up 7.8% year-over-year; average daily sales (ADS) exceeded expectations and improved 12.3% sequentially versus fiscal 2Q.
Negative Updates
Volume Recovery Still Modest
Volume contribution to sales growth was limited: price accounted for ~720 basis points of the 7.8% growth while volumes contributed only ~50 basis points in the quarter. Management noted they are not yet seeing 'home run' volume gains—progress is singles/doubles.
Read all updates
Q3-2026 Updates
Positive
Negative
Revenue and Average Daily Sales Growth
Fiscal 3Q sales of $1.047 billion, up 7.8% year-over-year; average daily sales (ADS) exceeded expectations and improved 12.3% sequentially versus fiscal 2Q.
Read all positive updates
Company Guidance
For fiscal Q4 MSC is guiding average daily sales growth of 6.5%–8.5% year‑over‑year (reflecting June ADS ≈7% and ~300 bps tougher comps versus Q3) with price expected around 6.5%–7%, gross margin to follow the historical 3Q→4Q sequential decline of ~40–50 bps, and an adjusted operating margin range of 10.0%–10.8% (midpoint implying adjusted incremental operating margins in the mid‑20s). For the fiscal year they updated D&A to ~ $100M, CapEx to ~ $100M, interest & other ≈ $30M, a tax rate of 24.5%–25.5%, and raised free‑cash‑flow conversion guidance to ≈95% (from 90%); balance sheet and capital return metrics include net debt ≈ $433M (~1x EBITDA) and ~$49M returned to shareholders in Q3 ($160M YTD).MSC Industrial Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
72
Positive
Cash Flow
60
Neutral
| Breakdown | TTM | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.91B | 3.77B | 3.82B | 4.01B | 3.69B | 3.24B |
| Gross Profit | 1.60B | 1.54B | 1.57B | 1.64B | 1.56B | 1.33B |
| EBITDA | 405.87M | 377.82M | 451.03M | 553.43M | 555.87M | 389.60M |
| Net Income | 230.54M | 199.33M | 258.59M | 343.23M | 339.79M | 216.91M |
Balance Sheet | ||||||
| Total Assets | 2.50B | 2.46B | 2.46B | 2.54B | 2.73B | 2.46B |
| Cash, Cash Equivalents and Short-Term Investments | 74.09M | 56.23M | 29.59M | 50.05M | 43.54M | 40.54M |
| Total Debt | 555.92M | 538.81M | 568.17M | 521.42M | 860.77M | 836.40M |
| Total Liabilities | 1.08B | 1.07B | 1.06B | 1.05B | 1.37B | 1.30B |
| Stockholders Equity | 1.42B | 1.39B | 1.39B | 1.48B | 1.35B | 1.15B |
Cash Flow | ||||||
| Free Cash Flow | 219.93M | 240.88M | 311.29M | 607.09M | 184.81M | 170.72M |
| Operating Cash Flow | 305.79M | 333.72M | 410.70M | 699.58M | 246.18M | 224.46M |
| Investing Cash Flow | -85.04M | -63.29M | -123.40M | -112.67M | -94.49M | -75.65M |
| Financing Cash Flow | -218.25M | -243.57M | -307.35M | -580.40M | -148.14M | -233.85M |
MSC Industrial Technical Analysis
Positive
97.52
Price Trends
110.19
Positive
100.95
Positive
93.06
Positive
Market Momentum
3.10
Negative
66.60
Neutral
64.56
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MSM, the sentiment is Positive. The current price of 97.52 is below the 20-day moving average (MA) of 117.35, below the 50-day MA of 110.19, and above the 200-day MA of 93.06, indicating a bullish trend. The MACD of 3.10 indicates Negative momentum. The RSI at 66.60 is Neutral, neither overbought nor oversold. The STOCH value of 64.56 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MSM.
MSC Industrial Risk Analysis
MSC Industrial disclosed 31 risk factors in its most recent earnings report. MSC Industrial reported the most risks in the "Ability to Sell" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
MSC Industrial Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $63.41B | 35.99 | 47.84% | 0.86% | 6.61% | -4.69% | |
77 Outperform | $12.23B | 30.83 | 21.64% | 0.70% | 7.54% | 6.04% | |
77 Outperform | $55.79B | 42.63 | 33.25% | 2.10% | 10.94% | 12.68% | |
72 Outperform | $6.86B | 29.66 | 15.00% | 3.96% | 4.41% | 16.62% | |
69 Neutral | $1.27B | 17.21 | 23.95% | 3.48% | 7.23% | 19.38% | |
67 Neutral | $2.45B | 28.11 | 17.90% | ― | 10.48% | 11.27% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
MSM
MSC Industrial
122.78
36.84
42.87%
AIT
Applied Industrial Technologies
330.85
88.40
36.46%
DXPE
DXP Enterprises
157.98
68.88
77.31%
FAST
Fastenal Company
48.60
7.00
16.83%
GIC
Global Industrial Company
33.21
6.09
22.47%
GWW
WW Grainger
1,342.98
317.95
31.02%
MSC Industrial Corporate Events
Dividends
MSC Industrial Declares Quarterly Cash Dividend, Signals Stability
Positive
Jun 16, 2026
On June 16, 2026, MSC Industrial Supply Co. announced that its board of directors declared a regular quarterly cash dividend of $0.87 per share on the company’s common stock. The dividend is scheduled to be paid on July 22, 2026, to sharehol...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.