GWW
W.W. Grainger, Inc.$1151.41
Sell
Target $930.45
Report: Mar 07, 2026Industrials • Industrial - Distribution • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$1151.41-19.2%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$930.45
(19% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$1,218.63
52 Week Low$893.99
Avg. 3 Month Volume276K
Efficiency
LTM Gross Margin39.1%
LTM EBITDA Margin15.3%
LTM EBIT Margin13.4%
LTM Operating Margin13.9%
LTM ROA19.3%
LTM ROE47.2%
LTM ROIC28.7%
LTM ROCE35.5%
Capital Structure
Market Cap (MM)$51.7B
Enterprise Value (MM)$54.0B
Shares Outstanding47.60M
Total Debt (MM)$2.86B
Cash & Equivalents (MM)$585.00M
LTM Net Debt (MM)$2.28B
LTM Net Debt/EBITDA0.8x
Growth
TTM Rev. Growth4.5%
Last 3-Yr Rev. CAGR5.6%
Last 3-Yr EBITDA CAGR4.7%
Last 3-Yr EPS CAGR5.5%
Valuation
Street Target Price$1,162.83
LTM EV/Revenue3.0x
LTM EV/Gross Profit7.7x
LTM EV/EBIT22.4x
LTM EV/EBITDA19.7x
LTM P/E30.3x
LTM EV/FCF40.5x
LTM P/FCF38.8x
LTM P/TB6.2x
LTM P/B13.8x
Dividend Yield0.8%
Payout Ratio25.5%
Executive SummarySituation: Current price is $1151.41 versus fair value $930.45 (-19.2% expected return), and valuation confidence is stable. Debate: Bull case depends on Negative Earnings Surprise and Guidance Revision If Grainger fails to meet its ambitious 2026 operating margin target of 15.4-15.9% (up from 13.9% in 2025), the market will likely re-rate the stock toward our $930.45 fair value. Bear case centers on Moat Erosion from Digital Entrants Low-cost competitors like Amazon Business could permanently impair Grainger's pricing power, leading to the bear case scenario of 13.0% margins. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
Proponents argue that Grainger's proprietary search algorithms and KeepStock software create a high-switching-cost moat that Amazon Business cannot replicate. They point to the 2026 guidance of 6.5-9% organic growth as evidence of a re-accelerating compounding engine.
Bear Case
The bear case focuses on structural margin erosion. Critics argue that price transparency in the MRO space is forcing Grainger to choose between market share and profitability, evidenced by the 150-basis-point operating margin drop in FY2025.
Key Catalysts
Near-Term (0-6 months)Impact: High
Negative Earnings Surprise and Guidance Revision If Grainger fails to meet its ambitious 2026 operating margin target of 15.4-15.9% (up from...
Near-Term (0-6 months)Impact: Moderate
Acceleration of Insider Selling Continued liquidation by the CEO and CFO would further signal to institutional holders that the current pric...
Long-Term (18+ months)Impact: Moderate
Grainger is relevant for analysis now because it is trading near all-time highs despite a clear deterioration in earnings quality and a mass...
Primary Risks
Concern: High
Moat Erosion from Digital Entrants Low-cost competitors like Amazon Business could permanently impair Grainger's pricing power, leading to t...
Concern: Medium
Tariff-Induced Cost Inflation Persistent tariffs on private-label goods sourced from Asia could prevent the company from reaching its 15.4%...
Concern: Medium
The stewardship verdict is 'Adequate but Cautious.' While the board is high-quality-featuring George S. Davis (former Intel CFO) and Christo...
Recent Activity
2026-02-03SEC Filing (8-K)
+5.37%Grainger reports 2025 results with 4.5% sales growth and issues 2026 outlook.
2025-08-01SEC Filing (8-K)
-10.30%Grainger reports Q2 2025 results with tariff impacts and updates full year guidance
2025-01-31SEC Filing (8-K)
-5.63%Grainger reports 2024 results with 4.2% sales growth and issues 2025 guidance.
2024-02-02SEC Filing (8-K)
+5.41%Grainger reports record 2023 results with 8.2% sales growth and issues 2024 guidance.
2023-04-27SEC Filing (8-K)
+5.54%Grainger reports Q1 2023 results with strong growth and raises full year guidance
Valuation Table
9.8/10Decision Grade
Scenario Range
$800
Bear
$1051
Base
$1269
Bull
$1151