W.W. Grainger, Inc. (GWW) reported fourth-quarter EPS and revenues of $2.13 and $2.08 billion, respectively, both outperforming Zacks Consensus Estimates. For 2011, adjusted EPS was $9.04 and revenues were a record $8.08 billion.
Grainger’s market share strategy is driven by increased product offerings. In addition, the company’s expansion of private label products, sales force investment and its focus on e-commerce remain successful. A sound balance sheet coupled with cash flow enable Grainger to further invest in growth opportunities, increase dividends and reinvest capital through share repurchases.
We have maintained our Outperform recommendation, which indicates that it will perform better than the market. Our $231.00 target price, 22.0x our 2012 EPS estimate, reflects this view.
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