Reasons Why You Should Retain Grainger Stock in Your Portfolio Now

W.W. Grainger, Inc. GWW has been gaining from volume growth in the High Touch Solutions segment and customer growth in the Endless Assortment segment. The High-Touch Solutions segment is gaining from an improved product mix. Repeat customer growth at MonotaRO and solid performance at Zoro are aiding the Endless Assortment segment.Volume improvement and pricing actions will drive top-line growth in the upcoming quarters. Grainger’s initiatives to manage inventory effectively, as well as its investments in e-commerce and digital capabilities, will drive profitability in the ongoing year.What is Aiding GWW’s Stock?Volume Growth Across Segments: The company’s High-Touch Solutions North America segment has been gaining from continued volume growth across all geographies and strong price realization. The gross margin was driven by an improved product mix. The segment will continue to benefit from pricing actions, and strength in commercial, transportation and heavy manufacturing. The Endless Assortment segment continues to be aided by customer acquisition and repeat customer growth at MonotaRO, as well as solid performance at Zoro.Upbeat Guidance:  GWW expects earnings per share of $39.00-$41.50 for 2025. The mid-point of the guidance indicates 3% growth from the 2024 reported figure. The company expects net sales between $17.6 billion and $18.1 billion. Sales growth is expected to be 2.7-5.2%. Daily sales growth is envisioned at 4-6.5%. Grainger’s initiatives and supply-chain advantages are likely to help the company meet its guidance.Benefits of High-Touch Solutions Segment:  The High-Touch Solutions model serves customers with complex buying needs, primarily in North America. This model helps Grainger create powerful customer-tailored solutions, deliver an improved customer experience and develop deep customer relationships, whether onsite, at a branch, over the phone, or online. The company creates value for customers through its sales and service representatives, technical product support, fulfillment capabilities, inventory management solutions and other services. The High-Touch Solutions market outgrew the U.S. MRO market in 2024. The company is witnessing continued growth with large and mid-sized customers in the United States. It focuses on re-engaging lapsed customers and acquiring new ones.Strategic Growth Actions: The company’s margin will continue to gain traction from its improved product mix, lower freight costs, pricing actions and ability to navigate supply-chain challenges. Grainger’s strategic initiatives and efforts to increase market share across the business are driving growth. Grainger is focused on improving the end-to-end customer experience by investing in its e-commerce and digital capabilities, and executing improvement initiatives within its supply chain. The company continues to develop online capabilities that promote a personalized, relevant, effortless experience for each customer through Grainger.com, eProcurement connections, 1 solutions and mobile applications.Near-Term Concerns for GraingerGWW has lately been witnessing higher SG&A expenses. The increase was caused mainly by higher headcount to support growth, compensation costs and continued investments in marketing. SG&A expenses , along with higher operating costs, are likely to affect Grainger's margins in the upcoming quarters.The implementation of tariffs has led to input cost inflation. This will continue to put margins under pressure in the upcoming quarters. The company is working with suppliers to minimize the cost impact, including identifying alternative supply and evaluating pricing actions.GWW Stock’s Price PerformanceIn the past year, Grainger’s shares have gained 20.6% against the industry’s decline of 1%.  Image Source: Zacks Investment Research Grainger’s Zacks Rank & Stocks to ConsiderGWW currently carries a Zacks Rank #3 (Hold).Some better-ranked stocks from the Industrial Products sector are Life360, Inc. LIF, IHI Corporation IHICY and Federal Signal Corporation FSS. LIF and IHICY sport a Zacks Rank #1 (Strong Buy), and FSS has a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank stocks here.Life360 delivered an average trailing four-quarter earnings surprise of 415%. The Zacks Consensus Estimate for LIF’s 2025 earnings is pinned at 24 cents per share, which indicates a year-over-year upsurge of 500%. Life360’s shares have soared 125% in a year.The Zacks Consensus Estimate for IHI Corp’s 2025 earnings is pegged at $1.26 per share, indicating a year-over-year increase of 3.8%. IHICY shares have skyrocketed 272% in a year.Federal Signal delivered an average trailing four-quarter earnings surprise of 6.4%. The Zacks Consensus Estimate for FSS’ 2025 earnings is pinned at $3.83 per share, which indicates year-over-year growth of 14.6%. The company’s shares have gained 10% in a year.5 Stocks Set to DoubleEach was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.Today, See These 5 Potential Home Runs >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report W.W. Grainger, Inc. (GWW): Free Stock Analysis Report Federal Signal Corporation (FSS): Free Stock Analysis Report IHI CORP (IHICY): Free Stock Analysis Report Life360, Inc. (LIF): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks