Wells Fargo Downgraded to Underweight with PT Cut to $225

Wells Fargo Downgraded to Underweight with PT Cut to $225

Wells Fargo has lowered its price target for WW Grainger (NYSE: GWW) to $225.00, down from $345.00, while maintaining an Underweight rating on the stock. The firm cited earnings per share (EPS) that beat expectations but noted contract value (CV) growth missed "by a wide margin." Analyst Michael McGinn highlighted ongoing macro uncertainty pressuring the selling environment. The stock is currently trading near its 52-week low of $893.99, with 13 analysts recently revising their earnings expectations downward.

WW Grainger delivered $3.53 EPS on 4.9% contract value growth, compared to Street expectations of $3.32 on 6.4% growth. The company has also lowered its 2025 revenue guidance to $6.455 billion from $6.535 billion, reflecting a business slowdown particularly within Insights, stemming from DOGE headwinds and cost-saving measures due to tariff uncertainty.

In other recent news, WW Grainger reported its financial results for the second quarter of 2025, showing a mixed performance. The company exceeded revenue expectations with $4.55 billion compared to the forecast of $4.53 billion. However, it missed its EPS target, reporting $9.97 against the anticipated $10.06. Following these results, BofA Securities lowered its price target for Grainger to $930 from $970, citing concerns over margins, though it maintained an Underperform rating. Wolfe Research also lowered its price target to $960 from $1,023, expressing concerns about the company’s pricing management during the current inflation cycle. UBS maintained its Neutral rating with a price target of $1,160, noting an operational miss due to weaker gross margins in the High Touch Solutions North America segment, despite slightly better-than-expected SG&A leverage.

These developments reflect varying analyst perspectives on Grainger’s current financial performance and future prospects. Federal Government cancellations and non-renewals continue to affect WW Grainger’s business, with 40% of Federal Government contracts still up for renewal in the second half of 2025.

References:
[1] https://za.investing.com/news/analyst-ratings/ww-grainger-stock-price-target-lowered-to-225-by-wells-fargo-93CH-3822045
[2] https://www.investing.com/news/analyst-ratings/ww-grainger-stock-price-target-lowered-to-225-by-wells-fargo-93CH-4172477