W.W. Grainger (NYSE:GWW) on Thursday was upgraded to Sector Perform from a previous investment rating of Underperform by analysts at RBC Capital Markets. They said the supplier of maintenance and repair products is driving growth with its ecommerce business.
"Grainger (GWW) was one of the standouts this earnings season with an operating beat and 8% upside 2023 guidance," Deane Dray, analyst at RBC, said in a February 23 report. "Investors have taken notice, since Grainger (GWW) rarely initiates guidance well above consensus."
RBC raised its price target on Grainger (GWW) to $679 a share from $502 a share, which assumes the shares trade at a 5% premium to a peer-group target multiple of 19 times 2023 earnings.
"Despite its predominately short-cycle business, Grainger (GWW) has historically outperformed during downturns, with the one exception being during the industrial recession of 2015-2016," according to RBC. "At the same time, most of Grainger’s (GWW) products are relatively non-discretionary to its customers, making core demand less volatile."