On Thursday, WESCO International (NYSE:WCC), a leading provider of electrical, industrial, and communications maintenance, repair and operating (MRO) and original equipment manufacturers (OEM) products, construction materials, and advanced supply chain management and logistics services, saw its price target increased by Oppenheimer. The firm raised its price target to $190 from $175, while maintaining an Outperform rating on the stock.
The upgrade comes after WESCO announced a series of positive developments over the past two weeks. These include the pending sale of its Wesco Integrated Supply business, which is expected to enhance the margin mix of its Utility & Broadband Solutions segment.
Additionally, the company is in the process of issuing senior notes aimed at improving its capital structure. Furthermore, WESCO reported favorable February sales results, which align well with first-quarter revenue estimates.
WESCO also highlighted a $50 million stock buyback that has been executed so far in the first quarter of 2024. The analyst from Oppenheimer believes that the recent improvement in WESCO's stock price is well justified given the positive news flow. With the first-quarter risk profile significantly narrowed in light of the February results, the analyst views the valuation as favorable for further growth.
For the first quarter of 2024, Oppenheimer's current and unchanged revenue estimate is a decrease of 3.5%, compared to a 4.1% decline expected by Wall Street and the company's own guidance for a low to mid-single-digit decrease. The flat sales results in February, which improved from a 5% decline in January, indicate a positive trend against easier comparisons.
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