W.W. Grainger (NYSE:GWW) Shares Gap Down Following Weak Earnings

Key Points

• W.W. Grainger shares gapped down nearly 10% to $936.18 after reporting weaker-than-expected earnings of $9.97 EPS, below analysts' estimates of $10.00.
• The company declared a quarterly dividend of $2.26, which represents an annualized dividend yield of 1.0% and a payout ratio of 23.21%.
• Analysts have mixed opinions on the stock, with price targets ranging from $966.00 to $1,144.00 and a consensus rating of "Hold" from MarketBeat.com.

W.W. Grainger, Inc. (NYSE:GWW - Get Free Report) gapped down before the market opened on Friday following a weaker than expected earnings announcement. The stock had previously closed at $1,039.54, but opened at $936.18. W.W. Grainger shares last traded at $942.67, with a volume of 125,587 shares trading hands.

The industrial products company reported $9.97 EPS for the quarter, missing analysts' consensus estimates of $10.00 by ($0.03). W.W. Grainger had a return on equity of 51.28% and a net margin of 11.08%. W.W. Grainger's quarterly revenue was up 5.6% on a year-over-year basis. During the same quarter in the prior year, the firm earned $9.76 earnings per share.

W.W. Grainger Dividend Announcement

The business also recently declared a quarterly dividend, which will be paid on Monday, September 1st. Stockholders of record on Monday, August 11th will be issued a $2.26 dividend. The ex-dividend date is Monday, August 11th. This represents a $9.04 dividend on an annualized basis and a dividend yield of 1.0%. W.W. Grainger's dividend payout ratio is presently 23.21%.

Analyst Upgrades and Downgrades

Several research firms have commented on GWW. JPMorgan Chase & Co. increased their price target on shares of W.W. Grainger from $1,100.00 to $1,125.00 and gave the company a "neutral" rating in a research report on Tuesday, May 27th. Wolfe Research lowered shares of W.W. Grainger from a "peer perform" rating to an "underperform" rating and set a $966.00 price objective for the company. in a research report on Thursday, April 3rd. Royal Bank Of Canada increased their price objective on shares of W.W. Grainger from $1,097.00 to $1,144.00 and gave the company a "sector perform" rating in a research report on Friday, May 2nd. Finally, Morgan Stanley decreased their price objective on shares of W.W. Grainger from $1,215.00 to $1,160.00 and set an "equal weight" rating for the company in a research report on Friday, July 11th. Two investment analysts have rated the stock with a sell rating, eight have issued a hold rating, two have assigned a buy rating and one has assigned a strong buy rating to the stock. According to MarketBeat.com, the stock presently has a consensus rating of "Hold" and an average target price of $1,116.25.

Insiders Place Their Bets

In other news, VP Krantz Nancy L. Berardinelli sold 280 shares of W.W. Grainger stock in a transaction on Friday, May 23rd. The stock was sold at an average price of $1,075.20, for a total transaction of $301,056.00. Following the transaction, the vice president owned 3,369 shares in the company, valued at $3,622,348.80. The trade was a 7.67% decrease in their position. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, VP Laurie R. Thomson sold 761 shares of the business's stock in a transaction dated Tuesday, May 6th. The shares were sold at an average price of $1,042.86, for a total transaction of $793,616.46. Following the completion of the sale, the vice president owned 578 shares in the company, valued at approximately $602,773.08. This trade represents a 56.83% decrease in their ownership of the stock. The disclosure for this sale can be found here. Company insiders own 6.10% of the company's stock.

Hedge Funds Weigh In On W.W. Grainger

Several institutional investors have recently bought and sold shares of the company. Brighton Jones LLC lifted its stake in W.W. Grainger by 46.8% in the fourth quarter. Brighton Jones LLC now owns 320 shares of the industrial products company's stock valued at $338,000 after buying an additional 102 shares during the last quarter. Alliancebernstein L.P. grew its holdings in W.W. Grainger by 4.8% during the fourth quarter. Alliancebernstein L.P. now owns 73,173 shares of the industrial products company's stock worth $77,128,000 after acquiring an additional 3,347 shares during the period. Huntington National Bank grew its holdings in W.W. Grainger by 8.2% in the fourth quarter. Huntington National Bank now owns 2,015 shares of the industrial products company's stock valued at $2,124,000 after purchasing an additional 153 shares during the last quarter. Cinctive Capital Management LP acquired a new stake in shares of W.W. Grainger during the fourth quarter valued at $1,305,000. Finally, Nicolet Advisory Services LLC boosted its stake in shares of W.W. Grainger by 3.3% during the fourth quarter. Nicolet Advisory Services LLC now owns 789 shares of the industrial products company's stock valued at $830,000 after acquiring an additional 25 shares during the last quarter. 80.70% of the stock is owned by institutional investors and hedge funds.

W.W. Grainger Trading Down 9.1%

The business has a 50 day moving average of $1,054.22 and a 200 day moving average of $1,035.63. The firm has a market cap of $45.40 billion, a price-to-earnings ratio of 24.21, a price-to-earnings-growth ratio of 2.73 and a beta of 1.18. The company has a quick ratio of 1.60, a current ratio of 2.74 and a debt-to-equity ratio of 0.59.

About W.W. Grainger

W.W. Grainger, Inc, together with its subsidiaries, distributes maintenance, repair, and operating products and services primarily in North America, Japan, the United Kingdom, and internationally. The company operates through two segments, High-Touch Solutions N.A. and Endless Assortment. The company provides safety, security, material handling and storage equipment, pumps and plumbing equipment, cleaning and maintenance, and metalworking and hand tools.

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