Wolfe Research lowers WW Grainger stock price target on pricing concerns

Published 04/08/2025, 18:10
Wolfe Research lowers WW Grainger stock price target on pricing concerns

Investing.com - Wolfe Research lowered its price target on WW Grainger (NYSE:GWW) to $960.00 from $1,023.00 on Monday, while maintaining an Underperform rating on the industrial supply company’s stock. The stock, currently trading near its 52-week low with an RSI indicating oversold conditions, has seen its share price decline by 11% in the past week.

The research firm cited concerns about the company’s ability to effectively manage pricing during the current inflation cycle, particularly following what it described as a "shortfall" in the second quarter of 2025.

Wolfe Research noted that the recent quarter "finally settled the tariff debate" at WW Grainger, suggesting resolution on a key issue that had been affecting the company’s outlook.

Despite acknowledging that WW Grainger’s relative valuation "looks attractive," Wolfe Research indicated the stock "lacks a catalyst to close the gap" that would justify a more positive rating.

The firm’s analyst expressed a need for "more confidence in management’s ability to price its way through this inflation cycle" before reconsidering its cautious stance on the industrial distributor.

In other recent news, WW Grainger Inc. reported its financial results for the second quarter of 2025, showcasing a mixed performance. The company exceeded revenue expectations, reporting $4.55 billion compared to the forecasted $4.53 billion. However, it missed its earnings per share (EPS) target, delivering $9.97 against the anticipated $10.06. BofA Securities responded by lowering its price target on Grainger to $930 from $970, citing concerns over margins, while maintaining an Underperform rating. UBS maintained its Neutral rating with a price target of $1,160, noting an "operational miss" due to weaker gross margins in the company’s High Touch Solutions North America segment. Despite the margin concerns, UBS highlighted that Grainger achieved slightly better-than-expected SG&A leverage. These developments reflect recent analyst actions and the company’s financial performance in the second quarter.

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