Grainger(US:GWW) Soochow Securities international·2024-11-08 06:30Investment Rating - The report maintains an "Accumulate" rating for the company [1][2]. Core Insights - The company's performance in Q3 2024 showed steady growth, with revenue increasing by 4.3% year-on-year to $4,388 million, and operating profit rising by 2.8% to $686 million. Earnings per share (EPS) also grew by 4.7% to $9.87 [2]. - The HTS business continues to outperform the industry, with a revenue growth of 3.3% to $3,515 million, slightly above the industry growth rate of 2.0-2.5%. The operating profit for this segment increased by 0.8% to $617 million, accounting for 90% of the company's total profit [2]. - The EA business showed strong growth, with a revenue increase of 8.1% to $791 million, although impacted by yen depreciation. The operating profit for this segment rose by 27.3% to $70 million [2]. - The company has maintained its guidance for 2024, projecting a revenue growth of approximately 4.0%-4.75% to $17,100-$17,300 million, with an expected EPS growth of 5.4%-7.3% [2]. - The report forecasts revenue growth of 4.3% in 2024, 6.1% in 2025, and 7.1% in 2026, with corresponding net profit growth of 2.2%, 9.6%, and 10.2% respectively [2]. Financial Summary - Revenue projections for 2023A, 2024E, 2025E, and 2026E are $16,478 million, $17,194 million, $18,239 million, and $19,539 million respectively, with year-on-year growth rates of 8.2%, 4.3%, 6.1%, and 7.1% [1][4]. - Net profit projections for the same years are $1,829 million, $1,870 million, $2,049 million, and $2,259 million, with growth rates of 18.2%, 2.2%, 9.6%, and 10.2% [1][4]. - The report indicates a decrease in gross margin to 39.2% and operating margin to 15.6% in Q3 2024 compared to the previous year [2].