WESCO: Secular And High-Growth Technology Will Move Past Margin And Cash Flow Pressure

Mar. 28, 2022 3:48 AM ETWESCO International, Inc. (WCC)
Badsha Chowdhury profile picture
Badsha Chowdhury
1.15K Followers

Summary

  • High-growth technologies like conference room infrastructure, automation, and IoT (Internet of Things) growth are WESCO International's current focus.
  • Increased cross-selling opportunities and merger synergies from the Anixter acquisition have enabled to exceed the earlier synergy target and will help expand the operating margin.
  • However, supply chain constraints and key customers' business model shift will adversely affect topline in the short term.
  • A dip in free cashflow generation can disrupt the deleveraging plans.

Warehouse Manager using a laptop

Marko Geber/DigitalVision via Getty Images

WCC’s Drivers Look To Strengthen

WESCO International's (NYSE:WCC) growth path would be impeded by the adverse effect of supply chain constraints and one of the utility customers' shifts from a full revenue model to

Non residential construction

United States Census Bureau

Revenue and Margin

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Revenue forecast

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EBITDA forecast

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Target price

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Total returns

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This article was written by

Badsha Chowdhury profile picture
1.15K Followers
I have more than 14 years of experience in analyzing and writing on stocks. I write on both long and short sides in an unbiased manner. I have been covering the energy sectors for the past 7 years, with the primary focus on the oilfield equipment services sector. I also cover the Industrial Supply industry. I occasionally co-author with Seeking Alpha contributor Thomas Prescott.

Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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