Msc Industrial Direct Company (MSM)
NYSE:MSM
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MSC Industrial
(NYSE:MSM)
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Rating:62Neutral
Price Target:
$96.00
▲(0.44% Upside)
Action:ReiteratedDate:04/08/26
The score is driven primarily by solid but moderating financial performance (margin normalization and inconsistent cash conversion) and a constructive earnings-call outlook (guidance for improved sales/margins and reiterated strong free-cash-flow targets). Technicals are neutral, while valuation is held back by a high P/E despite a supportive dividend yield.
Positive Factors
Balance Sheet Strength
Leverage at moderate levels and stable equity provide financial flexibility to fund capex, digital investments, and shareholder returns without stressing liquidity. Healthy ROE in the mid-teens indicates the business still generates solid returns, supporting durability through economic cycles.
Negative Factors
Margin Normalization
Material step-down in operating and net margins from peak levels reduces earnings power and raises reliance on pricing and productivity to sustain profits. Even with gross margin steady, lower bottom-line margins make results more sensitive to cost inflation and mix shifts over the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet Strength
Leverage at moderate levels and stable equity provide financial flexibility to fund capex, digital investments, and shareholder returns without stressing liquidity. Healthy ROE in the mid-teens indicates the business still generates solid returns, supporting durability through economic cycles.
Read all positive factors
MSC Industrial (MSM) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.34B
Dividend Yield3.96%
Average Volume (3M)652.98K
Price to Earnings (P/E)31.3
Beta (1Y)0.77
Revenue Growth-1.35%
EPS Growth-22.24%
CountryUS
Employees7,191
SectorIndustrials
Sector Strength72
IndustryIndustrial - Distribution
Share Statistics
EPS (TTM)0.82
Shares Outstanding55,834,312
10 Day Avg. Volume625,964
30 Day Avg. Volume652,980
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 Cap1.10
Enterprise Value/Revenue1.53
Enterprise Value/Gross Profit3.74
Enterprise Value/Ebitda14.59
Forecast
1Y Price Target
$92.25Price Target Upside-3.48% Downside
Rating ConsensusHold
Number of Analyst Covering5
EPS Forecast (FY)4.34
Revenue Forecast (FY)$3.96B
MSC Industrial Business Overview & Revenue Model
Company Description
MSC Industrial Direct Co., Inc., together with its subsidiaries, distributes metalworking and maintenance, repair, and operations (MRO) products and services in the United States, Canada, Mexico, and the United Kingdom. Its MRO products include cu...
How the Company Makes Money
MSC Industrial primarily makes money by purchasing industrial and MRO products from manufacturers and suppliers and reselling them to business customers at a markup through its distribution network. Its core revenue stream is product sales across ...
MSC Industrial Earnings Call Summary
Earnings Call Date:Apr 01, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Jul 07, 2026
Earnings Call Sentiment Positive
The call communicated a cautiously positive tone. Management emphasized margin expansion, strong cash conversion, solutions momentum (vending/In-Plant), and an encouraging Q3 outlook with implied acceleration in sales and margins. However, near-term volume pressure resulted from a deliberate sales reorganization, weather and government shutdown impacts, and significant input-cost inflation (notably tungsten/carbide). The company presented tangible productivity and pricing actions to offset cost headwinds and reiterated targets for free cash flow and margin improvement. Overall, positives around profitability, cash flow and forward-looking guidance modestly outweigh transitional operational challenges and macro/input-cost risks.Positive Updates
Revenue and Sales Performance
Fiscal Q2 sales of $918 million, up 2.9% year-over-year (ADS growth 2.9%). Price contributed ~6.5% (company cited 6.6% price benefit), while volumes declined ~4% YoY.
Negative Updates
Volume Contraction and Sales Disruption
Volumes declined ~4% YoY in Q2. ADS growth of 2.9% missed the midpoint outlook (4.5%). The final sales optimization restructuring (impacted ~130 customer-facing roles, net field heads down ~158 sequentially and >400 heads in last 12 months) created relationship changes, attrition and near-term volume drag.
Read all updates
Q2-2026 Updates
Positive
Negative
Revenue and Sales Performance
Fiscal Q2 sales of $918 million, up 2.9% year-over-year (ADS growth 2.9%). Price contributed ~6.5% (company cited 6.6% price benefit), while volumes declined ~4% YoY.
Read all positive updates
Company Guidance
Management guided fiscal 3Q to average daily sales growth of 5%–7% year‑over‑year (noting a March estimate of ~4% that reflects a ~100 bp Good Friday timing headwind), gross margin of ~41%, and adjusted operating margin of 9.7%–10.3% (implying ~25% adjusted incremental margin at the midpoint); they reiterated full‑year assumptions of D&A $95–100M, interest & other ≈$35M, capital expenditures (including cloud) $100–110M, a tax rate of 24.5%–25.5% and free cash flow generation of ~90% of net income, plus a full‑year target of roughly 20% adjusted incremental margins and a mid‑single‑digit sales growth outcome, while noting pricing drove ~6.5%–6.6% of Q2 ADS and management expects similar back‑half pricing (roughly 6.5%–7%) with a modest step‑up in variable OpEx as sales increase.MSC Industrial Financial Statement Overview
Summary
Income Statement
63
Positive
Balance Sheet
74
Positive
Cash Flow
56
Neutral
| Breakdown | TTM | Aug 2025 | Aug 2024 | Aug 2023 | Aug 2022 | Aug 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.83B | 3.77B | 3.82B | 4.01B | 3.69B | 3.24B |
| Gross Profit | 1.56B | 1.54B | 1.57B | 1.64B | 1.56B | 1.33B |
| EBITDA | 400.58M | 377.82M | 451.03M | 553.43M | 555.87M | 389.60M |
| Net Income | 207.03M | 199.33M | 258.59M | 343.23M | 339.79M | 216.91M |
Balance Sheet | ||||||
| Total Assets | 2.45B | 2.46B | 2.46B | 2.54B | 2.73B | 2.46B |
| Cash, Cash Equivalents and Short-Term Investments | 46.19M | 56.23M | 29.59M | 50.05M | 43.54M | 40.54M |
| Total Debt | 558.73M | 538.81M | 568.17M | 521.42M | 860.77M | 836.40M |
| Total Liabilities | 1.07B | 1.07B | 1.06B | 1.05B | 1.37B | 1.30B |
| Stockholders Equity | 1.38B | 1.39B | 1.39B | 1.48B | 1.35B | 1.15B |
Cash Flow | ||||||
| Free Cash Flow | 214.98M | 240.88M | 311.29M | 607.09M | 184.81M | 170.72M |
| Operating Cash Flow | 301.19M | 333.72M | 410.70M | 699.58M | 246.18M | 224.46M |
| Investing Cash Flow | -55.05M | -63.29M | -123.40M | -112.67M | -94.49M | -75.65M |
| Financing Cash Flow | -241.83M | -243.57M | -307.35M | -580.40M | -148.14M | -233.85M |
MSC Industrial Technical Analysis
Positive
95.58
Price Trends
90.28
Positive
87.20
Positive
86.43
Positive
Market Momentum
0.49
Negative
64.31
Neutral
59.33
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 95.58 is above the 20-day moving average (MA) of 89.40, above the 50-day MA of 90.28, and above the 200-day MA of 86.43, indicating a bullish trend. The MACD of 0.49 indicates Negative momentum. The RSI at 64.31 is Neutral, neither overbought nor oversold. The STOCH value of 59.33 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $54.32B | 28.33 | 45.93% | 0.86% | 4.83% | -3.60% | |
76 Outperform | $1.27B | 15.56 | 23.59% | 3.48% | 0.16% | 2.99% | |
75 Outperform | $2.31B | 19.31 | 18.67% | ― | 12.76% | 36.11% | |
75 Outperform | $55.33B | 36.60 | 32.83% | 2.10% | 6.92% | 5.98% | |
72 Outperform | $10.47B | 25.36 | 21.74% | 0.70% | 4.03% | 5.93% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $5.34B | 31.30 | 15.00% | 3.96% | -1.35% | -22.24% |
* Industrials Sector Average
MSM
MSC Industrial
95.58
23.29
32.22%
AIT
Applied Industrial Technologies
280.74
50.47
21.92%
DXPE
DXP Enterprises
148.80
67.35
82.69%
FAST
Fastenal Company
48.18
10.73
28.66%
GIC
Global Industrial Company
33.13
11.59
53.81%
GWW
WW Grainger
1,146.72
189.83
19.84%
MSC Industrial Corporate Events
Dividends
MSC Industrial Announces Regular Quarterly Cash Dividend
Positive
Mar 19, 2026
On March 19, 2026, MSC Industrial’s board declared a regular quarterly cash dividend of $0.87 per share on its common stock, reinforcing the company’s pattern of returning capital to shareholders. The dividend will be paid on April 22,...
Business Operations and StrategyExecutive/Board Changes
MSC Industrial Adds Supply Chain Expert to Board
Positive
Mar 2, 2026
MSC Industrial Supply Co., a major North American distributor of metalworking and MRO products and services, leverages a portfolio of about 2.5 million items and advanced inventory and supply chain solutions to support industrial customers’ ...
Executive/Board ChangesShareholder Meetings
MSC Industrial shareholders back directors and governance measures
Positive
Jan 21, 2026
On January 21, 2026, MSC Industrial held its 2026 Annual Meeting of Shareholders, where investors voted on the election of directors and several key governance and compensation proposals. Shareholders decisively re-elected all ten director nominee...
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.