We Reiterate Grainger's $230 Fair Value Estimate Amidst a Sluggish Operating Environment
We reiterate Grainger’s $230 fair value estimate and wide moat rating following the company’s third-quarter earnings report. With soft recent results, and a share price only 10% below our fair value estimate, we need a slightly larger margin of safety before deeming shares as attractively undervalued. While investors responded negatively to the 2016 EPS outlook reduced from $11.20-$12.20 to $11.40-$11.70, we were not surprised as our own forecast continues to anticipate $11.49 of EPS for the yea...W.W. Grainger is a distributor of maintenance, repair and operating (MRO) products and services in North America, Japan and Europe. The company's MRO product offering is grouped under material-handling equipment, safety and security supplies, lighting and electrical products, power and hand tools, pumps and plumbing supplies, cleaning and maintenance supplies and metalworking tools categories. The company's segments are the United States, which provides MRO products and services through its eCommerce platform, catalogs, branches and sales and service representatives; and Canada, which serves Canadian customers through its distribution center and branch network as well as sales and service representatives.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
We have operations in 27 countries.
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