WW Grainger Inc.: 1Q26 Review: Good Quarter, But Headwinds Limit Upside to EPS

Research evidence excerpt

WW Grainger Inc.: 1Q26 Review: Good Quarter, But Headwinds Limit Upside to EPS

Equity Research

U.S. Industrial Technology & Distributors

11 May 2026

WW Grainger Inc.

1Q26 Review: Good Quarter, But

Headwinds Limit Upside to EPS

We Do Not See Risk:Reward as Favorable Right Now, Remain GWW UNDERWEIGHT

UW, PT Raised to $1,171 (prior $1,047) Unchanged

U.S. Industrial Technology POSITIVE & Distribution

Unchanged

We raise our FY26e EBITDA and EPS estimates by 5% but GWW commentary including cost

headwinds discourages us from assuming further earnings upside beyond the raised Price Target USD 1171.00

raised 12% from USD 1047.00

guidance. We prefer stocks in our coverage with better risk:reward, and remain Underweight

GWW, but we are raising our PT to $1,171 (prior $1,047). Price (11-May-26) USD 1226.09

Potential Upside/Downside -4.5%

Key Takeaways: GWW delivered both better than expected volume and pricing in Q1 but raised Source: Bloomberg, Barclays Research

guidance only modestly (+4%) due to cost headwinds and some tailwinds to gross margins in Q1

are not expected to repeat. While GWW proved us wrong by delivering both strong volume Market Cap (USD mn) 57887

growth and price in Q1, one swallow doesn't make a summer, and we want to see further Shares Outstanding (mn) 47.21

evidence of delivery before we become more constructive on the name. While we see more Free Float (%) 93.75

upside risk than downside risks to estimates, we do not see GWW stock risk:reward as favorable, 52 Wk Avg Daily Volume (mn) 0.3

as recent share price performance limits upside. Furthermore, the stock is trading at more than Dividend Yield (%) 0.81

1SD above its historical mean NTM EV/EBITDA, which suggests GWW stock is already pricing in Return on Equity TTM (%) 48.10

further earnings upgrades.