WW Grainger (NYSE:GWW) shares rose more than 5% pre-market today after Stephens analysts upgraded the company from Equal Weight to Overweight, while also increasing the price target from $1,000 to $1,250.

The analysts expressed that the upgrade might have been more timely in 2022, given WW Grainger’s strong performance during challenging inflationary and supply chain conditions, which led to an impressive beat and raise cycle.

Moving forward, the analysts developed a strong belief in the company’s trajectory toward becoming a top-tier industrial entity, anticipating a mid-teens total shareholder return. This outlook is supported by two main factors: the lasting impacts of digital transformation that are expected to enhance market share through high-touch customer interactions, potentially resulting in a double-digit organic EPS compound annual growth rate; and strategic capital allocation that could contribute an additional 300 to 400 basis points to annual returns.

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