Atlantic Equities - WW Grainger (GWW) Model Update Post-Q417

Report

Atlantic Equities

Richard Radbourne

Model Update Post-Q417

FY18/19 EPS estimates move higher largely to reflect US tax reform, and to a lesser extent benefits from ongoing restructuring actions. PT increased on higher EPS estimates, but no change to Neutral rating.

06/02/2018 8 EN

Underlying

WW Grainger

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Provider

Atlantic Equities

Formed in 2003 by an established team from Cazenove, one of the most respected investment banks in the UK, Atlantic Equities conducts and publishes fundamental, bottom up research on mid and large cap US companies.

Atlantic provide order execution through a wide range of DMA products and algorithmic trading suites.

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Analysts

Richard Radbourne

Other Reports on these Companies

Atlantic Equities

Valuation Full - Reiterate Neutral

Q218 delivered meaningful EPS upside and GWW is executing well, while raised FY18 guidance may still prove too conservative. However, we view the current valuation as discounting the latter and at risk as the US pricing reset / restructuring actions are completed.

July 19, 2018 July 19, 2018 9 EN

Atlantic Equities

Good Start to Q118 / Valuation Full

GWW shares rose 5% yesterday which fairly reflects the 9% mid-point increase to FY18 EPS guidance (+$1.35-1.15 â†’ $14.30-15.30). We have raised our FY18/19 EPS estimates by $1.20/$0.95. However, at ~17.5x (113% S&P500-relative) our revised FY19E EPS estimate we view the valuation as full.

April 20, 2018 April 20, 2018 7 EN

Atlantic Equities

Progress Being Made but Valuation Fair

Volume growth has responded well to US pricing actions and a robust industrial economy bodes well for FY18, while restructuring actions support margin improvement through FY19. However, margin trajectory thereafter remains a key question and is likely to cap the valuation. Hence, we remain Neutral.

March 8, 2018 March 8, 2018 29 EN

Model update

This report contains forecasts updated for reported Q218 results. Neither our financial nor PSU estimates are materially changed and we remain Overweight with a 12m PT of $365.

October 1, 2018 October 1, 2018 5 EN

Kunaal Malde ... (+2)

Kunaal Malde
CFA

V/MA: strong core, adjacencies more competitive

V/MA remain core long term holdings with secular cash to card tailwinds driving strong growth long term, supported by developments such as contactless. Valuation remains reasonable, although newer growth areas such as B2B face greater competition. We remain Overweight V/MA, raise our price targets to $173 and $250 respectively and currently favour V which trades on a PE of 28x, three turns lower than MA.

October 1, 2018 October 1, 2018 17 EN

John Heagerty ... (+3)

John Heagerty
Nadja Heini
CFA

Banks: Trading update and 3Q18 preview

Market volatility has moderated significantly since the beginning of the year, ceasing to be a tailwind for the banks' trading revenues in 3Q18. Despite the strong IB pipelines (announced M&A is up 40% YTD), fee pools have been affected by timing issues and are down 15-20% across the industry for the current quarter. Medium term, the outlook remains positive thanks to improving GDP growth, benign credit conditions, rising interest rates and a deregulatory focus. We have lowered our 3Q18 EPS estimates by 3% on average. Our longer term forecasts decline only modestly by 1%. C remains our t...

September 27, 2018 September 27, 2018 14 EN

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Model Update Post-Q417

Valuation Full - Reiterate Neutral

Good Start to Q118 / Valuation Full

Progress Being Made but Valuation Fair

Model update

V/MA: strong core, adjacencies more competitive

Banks: Trading update and 3Q18 preview

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