SiteOne Landscape Supply, Inc., together with its subsidiaries, engages in the wholesale distribution of landscape supplies in the United States and Canada. The company provides irrigation products, including controllers, valves, sprinkler heads, irrigation pipes, micro irrigation, and drip products; fertilizer, grass seed, and ice melt products; control products, such as herbicides, fungicides, rodenticides, and other pesticides; landscape accessories that include mulches, soil amendments, drainage pipes, tools, and sods; nursery goods, which consist of deciduous and evergreen shrubs, ornamental, shade, evergreen trees, field grown and container-grown nursery stock, roses, perennials, annuals, bulbs, and plant species and cultivars; hardscapes, such as pavers, natural stones, blocks, and other durable materials; and outdoor lighting products that include lighting fixtures, LED lamps, wires, transformers, and accessories. It also offers consultative services consisting of assistance with irrigation project take-offs, commercial project planning, generation of sales leads, business operations, and product support services, as well as a series of technical and business management seminars; and distributes branded products of third parties. The company offers its products under the LESCO, SiteOne Green Tech, and Pro-Trade brand names. It markets its products primarily to residential and commercial landscape professionals who specializes in the design, installation, and maintenance of lawns, gardens, golf courses, and other outdoor spaces through branch network and direct distribution. SiteOne Landscape Supply, Inc. was incorporated in 2013 and is headquartered in Roswell, Georgia.

SiteOne Landscape Supply, Inc.

W.W. Grainger, Inc. GWW has reported earnings per share (EPS) of $9.97 in second-quarter 2025, missing the Zacks Consensus Estimate of $10.00. However, the bottom line improved 2% year over year.
Grainger’s quarterly revenues rose 5.6% year over year to $4.55 billion. The top line beat the Zacks Consensus Estimate of $4.52 billion. Daily sales increased 5.6% from the prior-year quarter. We predicted daily sales to increase 3.8% in the quarter.
W.W. Grainger, Inc. Price, Consensus and EPS Surprise
Grainger’s Q2 Segmental Performance
The High-Touch Solutions N.A. segment’s daily sales moved up 2.5% in the quarter from the second quarter of 2025, backed by growth across all geographies. Our model predicted year-over-year daily sales growth of 2.2% for the quarter.
The Endless Assortment segment’s daily sales grew 19.7% in the quarter due to solid performance at both MonotaRO and Zoro. The reported figure beat our estimated growth of 11%.
GWW’s Q2 Margins Dip Y/Y
Cost of sales rose 6.9% year over year to $2.8 billion. The gross profit rose 3.6% year over year to $1.75 billion. The gross margin came in at 38.5% compared with 39.3% in the prior-year quarter.
The company’s operating income in the quarter was up 4.5% year over year to $678 million. The operating margin was 14.9% compared with 15.1% in the prior-year quarter.
Grainger’s Q2 Cash Flow & Balance Sheet Updates
GWW had cash and cash equivalents of $0.6 billion at the end of the second quarter of 2025, down from $1 billion at the 2024 end. The cash flow from operating activities was $377 million in the second quarter of 2025 compared with $411 million in the prior-year quarter.
Long-term debt was $2.34 billion as of June 30, 2025, compared with $2.28 billion as of Dec. 31, 2025. Grainger returned $336 million to shareholders through dividends and share buybacks in the reported quarter.
GWW Updates 2025 Outlook
GWW expects net sales between $17.9 billion and $18.2 billion, updated from the prior stated $17.6-$18.1 million. Sales growth is anticipated to be 4.4-5.9%. Daily sales growth is envisioned at 4.5-6% compared with the earlier mentioned 4-6.5%. EPS is expected to be $38.50-$40.25 compared with the prior stated $39.00-$41.50.
Grainger Stock’s Price Performance
In the past year, the company’s shares have gained 11.2% compared with the industry’s growth of 16.6%.
Image Source: Zacks Investment Research
GWW’s Zacks Rank
Grainger currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Peer Performance
MSC Industrial Direct Company, Inc. MSM reported a third-quarter fiscal 2025 (ended on May 31, 2025) adjusted EPS of $1.08, which beat the Zacks Consensus Estimate of $1.03. The bottom line decreased 18.8% year over year.
MSC Industrial generated revenues of around $971 million in the quarter under review, down 0.8% from $979 million in the year-ago quarter. The top line beat the Zacks Consensus Estimate of $970 million. Average daily sales fell 0.8% year over year in the quarter. However, this came in line with the company’s expectations, driven by improving performance in volumes.
SiteOne Landscape Supply, Inc. SITE reported an adjusted EPS of $2.86 in the second quarter of 2025, missing the Zacks Consensus Estimate of $2.89. The company posted earnings of $2.63 per share in the second quarter of 2024.
SITE registered revenues of $1.46 billion for the June-end quarter of 2025, in line with the Zacks Consensus Estimate. The top line rose 3.4% year over year.
Industrial Services Stock Awaiting Results
Hillenbrand, Inc. HI is set to release third-quarter fiscal 2025 results on Aug. 11.
The Zacks Consensus Estimate for HI’s EPS is pegged at 50 cents for the fiscal third quarter, suggesting a decline of 41.2% from the year-ago reported figure. The Zacks Consensus Estimate for total revenues is pinned at $572.4 million, indicating a year-over-year decrease of 27.3%.
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Grainger Earnings Miss Estimates in Q2, Revenues Increase Y/Y

MSC Industrial (MSM) came out with quarterly earnings of $1.08 per share, beating the Zacks Consensus Estimate of $1.03 per share. This compares to earnings of $1.33 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of +4.85%. A quarter ago, it was expected that this distributor of industrial tools and supplies would post earnings of $0.68 per share when it actually produced earnings of $0.72, delivering a surprise of +5.88%.
Over the last four quarters, the company has surpassed consensus EPS estimates three times.
MSC Industrial, which belongs to the Zacks Industrial Services industry, posted revenues of $971.15 million for the quarter ended May 2025, surpassing the Zacks Consensus Estimate by 0.10%. This compares to year-ago revenues of $979.35 million. The company has topped consensus revenue estimates two times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
MSC Industrial shares have added about 13.8% since the beginning of the year versus the S&P 500's gain of 5.5%.
What's Next for MSC Industrial?
While MSC Industrial has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for MSC Industrial was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.93 on $946.5 million in revenues for the coming quarter and $3.55 on $3.74 billion in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Industrial Services is currently in the top 31% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, SiteOne Landscape (SITE), has yet to report results for the quarter ended June 2025.
This company is expected to post quarterly earnings of $2.89 per share in its upcoming report, which represents a year-over-year change of +9.9%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
SiteOne Landscape's revenues are expected to be $1.48 billion, up 4.9% from the year-ago quarter.
Should You Invest in MSC Industrial Direct Company, Inc. (MSM)?
Before you invest in MSC Industrial Direct Company, Inc. (MSM), want to know the best stocks to buy for the next 30 days? Check out Zacks Investment Research for our free report on the 7 best stocks to buy.
Zacks Investment Research has been committed to providing investors with tools and independent research since 1978. For more than a quarter century, the Zacks Rank stock-rating system has more than doubled the S&P 500 with an average gain of +24.08% per year. (These returns cover a period from January 1, 1988 through May 6, 2024.)
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MSC Industrial (MSM) Q3 Earnings and Revenues Beat Estimates

W.W. Grainger, Inc. GWW has reported adjusted earnings per share (EPS) of $9.71 in fourth-quarter 2024, missing the Zacks Consensus Estimate of $9.75.
Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
Grainger restated EPS for the fourth quarter of 2023 to $7.89, including the adjustment for the loss on sale of Grainger's subsidiary, E&R Industrial Sales, Inc., completed in that quarter. GWW previously reported adjusted EPS of $8.33 for the quarter, which excluded the impacts of the sale.
Grainger’s quarterly sales rose 5.9% year over year to $4.23 billion. However, the top line missed the Zacks Consensus Estimate of $4.24 billion. Daily sales increased 4.2% from the prior-year quarter. We predicted daily sales to increase 3.8%.
W.W. Grainger, Inc. Price, Consensus and EPS Surprise
W.W. Grainger, Inc. price-consensus-eps-surprise-chart | W.W. Grainger, Inc. Quote
Grainger’s Q4 Segmental Performance
The High-Touch Solutions N.A. segment’s daily sales rose 2.3% in the quarter from the fourth quarter of 2023 due to continued growth across all geographies. Our model predicted year-over-year organic daily sales growth of 5%.
The Endless Assortment segment’s daily sales grew 13.3% in the quarter due to increased customer acquisitions across the segment and enterprise customer growth at MonotaRO. Our model predicted year-over-year organic daily sales growth of 8.7% for the quarter.
GWW’s Q4 Operational Update
The cost of sales climbed 5.1% year over year to $2.56 billion. The gross profit rose 7.2% year over year to $1.68 billion. The gross margin came in at 39.6% in the quarter compared with the prior-year period’s 39.1%.
Selling, general and administrative expenses rose 3.7% year over year to $1.04 billion. Grainger’s operating income in the quarter was up 19% year over year to $663 million. The operating margin came in at 15% compared with 13.9% in the prior-year quarter.
Grainger’s Q4 Cash Flow & Balance Sheet Updates
The company had cash and cash equivalents of $1.04 billion at the end of 2024, up from $0.67 billion at 2023-end. Cash flow from operating activities was $2.11 billion in 2024 compared with $2.03 billion last year.
The long-term debt was $2.28 billion as of Dec. 31, 2024, compared with $2.27 million as of Dec. 31, 2023. Grainger returned $1.6 billion to shareholders via dividends and share buybacks through 2024. The capital expenditure for the year was $541 million, higher than $445 million in 2023.
GWW’s 2024 Performance
Adjusted EPS rose 23.6% year over year to $38.96 in 2024, which beat the Zacks Consensus Estimate of $38.95. Including one-time items, earnings were $38.71 compared with $36.23 in 2023. The figure came in line with the company’s expected EPS of $38.65-$39.35.
Sales improved 4.2% year over year to $17.17 billion and came within the company’s guidance of $17.1-$17.3 billion. The top line met the Zacks Consensus Estimate. Sales rose 4.7% on a daily, on a constant-currency basis.
Grainger’s 2025 Outlook
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%. Earnings per share are expected to be $39.00-$41.50.
GWW Stock’s Price Performance
In the past year, GWW shares have gained 23% compared with the industry’s 5.9% growth.
Image Source: Zacks Investment Research
Grainger’s Zacks Rank
The company currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
GWW’s Peer Performances
MSC Industrial Direct Company, Inc. MSM reported first-quarter fiscal 2025 (ended on Nov. 30, 2024) adjusted earnings per share of 86 cents, beating the Zacks Consensus Estimate of 73 cents.
The bottom line marked a 31% plunge from earnings of $1.25 in the year-ago quarter. The downfall was attributed to lower sales, higher operating expenses and elevated interest expenses.
MSM generated sales of $928.5 million in the quarter under review, down 2.7% from the year-ago quarter. Revenues were impacted by weak demand, unfavorable foreign exchange impacts and negative impacts of pricing. The top line, however, surpassed the Zacks Consensus Estimate of $905 million.
Industrial Services Stocks Awaiting Results
Hillenbrand, Inc. HI is set to release its first-quarter fiscal 2025 results on Feb. 5.
The Zacks Consensus Estimate for HI’s EPS for the fiscal first quarter is pegged at 54 cents, suggesting a decline of 21.7% from the year-ago reported figure. The Zacks Consensus Estimate for total revenues is pinned at $695 million, indicating a year-over-year decrease of 10%.
SiteOne Landscape Supply, Inc. SITE is set to release its fourth-quarter 2024 results on Feb. 12.
The Zacks Consensus Estimate for SITE’s loss per share is pegged at 28 cents for the fourth quarter. The company incurred a loss of 8 cents in the year-ago quarter. The Zacks Consensus Estimate for total revenues is pinned at $1.01 billion, indicating a year-over-year increase of 4.3%.
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Grainger Earnings & Sales Miss Estimates in Q4, Increase Y/Y

In trading on Wednesday, shares of SiteOne Landscape Supply Inc (Symbol: SITE) crossed above their 200 day moving average of $149.69, changing hands as high as $153.75 per share. SiteOne Landscape Supply Inc shares are currently trading up about 2.2% on the day. The chart below shows the one year performance of SITE shares, versus its 200 day moving average:
Looking at the chart above, SITE's low point in its 52 week range is $114.60 per share, with $188.01 as the 52 week high point — that compares with a last trade of $150.49.
Click here to find out which 9 other stocks recently crossed above their 200 day moving average »
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SITE Makes Bullish Cross Above Critical Moving Average

Below is Validea's guru fundamental report for SITEONE LANDSCAPE SUPPLY INC (SITE). Of the 22 guru strategies we follow, SITE rates highest using our Value Investor model based on the published strategy of Benjamin Graham. This deep value methodology screens for stocks that have low P/B and P/E ratios, along with low debt and solid long-term earnings growth.
SITEONE LANDSCAPE SUPPLY INC (SITE) is a mid-cap growth stock in the Constr. & Agric. Machinery industry. The rating using this strategy is 57% based on the firm’s underlying fundamentals and the stock’s valuation. A score of 80% or above typically indicates that the strategy has some interest in the stock and a score above 90% typically indicates strong interest.
The following table summarizes whether the stock meets each of this strategy's tests. Not all criteria in the below table receive equal weighting or are independent, but the table provides a brief overview of the strong and weak points of the security in the context of the strategy's criteria.
Detailed Analysis of SITEONE LANDSCAPE SUPPLY INC
SITE Guru Analysis
SITE Fundamental Analysis
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About Benjamin Graham: The late Benjamin Graham may be the oldest of the gurus we follow, but his impact on the investing world has lasted for decades after his death in 1976. Known as both the "Father of Value Investing" and the founder of the entire field of security analysis, Graham mentored several of history's greatest investors -- including Warren Buffett -- and inspired a slew of others, including John Templeton, Mario Gabelli, and another of Validea's gurus, John Neff. Graham built his fortune and reputation after living through some extremely difficult times, including both the Great Depression and his own family's financial woes following his father's death when Benjamin was a young man. His investment firm posted per annum returns of about 20 percent from 1936 to 1956, far outpacing the 12.2 percent average return for the market during that time.
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SITE Factor-Based Stock Analysis - Benjamin Graham

For Immediate Release
Chicago, IL – October 30, 2024 – Today, Zacks Equity Research like Siemens SIEGY, W.W. Grainger, Inc. GWW and SiteOne Landscape Supply, Inc. SITE.
Industry: Industrial Services
Link: https://www.zacks.com/commentary/2359697/3-industrial-services-stocks-to-consider-amid-industry-challenges
The Zacks Industrial Services industry has been bearing the brunt of the prolonged contraction in the manufacturing sector as customers remain cautious about spending. Flared-up input costs have added to the woes.
Despite the current setback, the rise in e-commerce activities will be a key catalyst for the industry. Companies like Siemens, W.W. Grainger, Inc. and SiteOne Landscape Supply, Inc. are positioned for growth by leveraging strategies to capitalize on this demand. The companies have also been focusing on lowering costs, increasing productivity and efficiency, and investing in automation and digitization, which will aid growth.
Industry Description
The Zacks Industrial Services industry comprises companies that provide industrial equipment products and MRO (maintenance, repair and operations) services. It includes routine maintenance, emergency maintenance and spare part inventory control, which keep a facility and its equipment in good operating condition. Industry participants serve a wide array of customers, ranging from commercial, government and healthcare to manufacturing.
The industry's products (power tools, hand tools, cutting fluids, lubricants, personal protective equipment and consumables) are utilized in production and plant maintenance but are not directly related to customers’ core products or services. These companies reduce MRO supply-chain costs and improve customers' plant floor productivity by offering inventory management, and process and procurement solutions.
Trends Shaping the Future of the Industrial Services Industry
Extended Downturn in Manufacturing Activity is Concerning: The manufacturing sector contributes around 70% to the industry's revenues. Customer activity trends are historically correlated to changes in the Industrial Production Index. Per the Federal Reserve’s last update, industrial production was down 0.6% in the 12 months ended September 2024.
The durable goods manufacturing index was down 1.9% during the period. The Institute for Supply Management’s manufacturing index had languished in contraction territory for a consecutive 16 months until February 2024. March saw a slight uptick to 50.3%, which ended the prolonged contraction.
However, this was not sustained as the index slipped to the contraction territory again, with a 49.2% reading in April. It has been below 50% since then and was 47.2% in September. The average for the 12 months ended September 2024 is 48%.
The New Orders index has also contracted for the sixth consecutive month in September. The index has not delivered consistent growth since the end of its 24-month expansion streak in May 2022. Some industry players have reported gradually easing supply-chain issues, with improvements in lead times. Once the situation normalizes, strong demand in the diverse end markets will drive the industry’s growth.
Pricing Actions to Combat High Costs: The industry has been experiencing significant inflation levels, including higher prices for labor, freight and fuel. The companies are witnessing labor shortages for some positions and incurring steep labor costs to meet demand. Industry players are focusing on pricing actions, cost-cutting measures, efforts to improve productivity and efficiency, and the diversification of the supplier base to mitigate some of these headwinds.
E-commerce to be a Growth Driver: MRO demand is significantly impacted by the evolution of e-commerce. Customer demand for highly tailored solutions, with real-time access to information and rapid delivery of products, is rising. Customers want to execute their business activities in the most efficient way possible, which often means online.
According to Statista, global e-commerce sales are expected to see a compound annual growth rate (CAGR) of 9.5% between 2024 and 2029. Turkey is expected to lead the retail e-commerce development with a projected CAGR of 11.58% over this period, closely followed by Brazil and India.
The U.S. retail e-commerce market is expected to cross the $1.5-trillion mark in 2026 and grow, seeing a CAGR of 9% between 2024 and 2029. To capitalize on this trend, industrial service companies are heavily investing in improving their digital capabilities and increasing their e-commerce share.
Zacks Industry Rank Indicates Dull Prospects
The group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bearish prospects in the near term. The Zacks Industrial Services Industry, a 19-stock group within the broader Zacks Industrial Products sector, currently carries a Zacks Industry Rank #158, which places it in the bottom 37% of 251 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few Industrial services stocks that investors can add to their portfolio, it is worth taking a look at the industry’s stock-market performance and its valuation picture.
Industry Vs S&P 500 & Sector
The Industrial Services industry has underperformed its sector and the Zacks S&P 500 composite over the past year.
Over this period, the industry has gained 17.8% against the sector’s growth of 35%. The Zacks S&P 500 composite has moved up 39.4%.
Industry's Current Valuation
On the basis of the forward 12-month EV/EBITDA ratio, a commonly used multiple for valuing Industrial Services companies, we see that the industry is currently trading at 29.30X compared with the S&P 500’s 14.47X and the Industrial Products sector’s forward 12-month EV/EBITDA of 20.65X.
Over the last five years, the industry traded as high as 29.52X and as low as 6.04X, the median being 19.66X.
3 Industrial Services Stocks to Keep an Eye On
Siemens: The company has teamed up with ServiceNow to enhance industrial cybersecurity and drive the integration of generative AI into shopfloor operations. The company has also collaborated with Microsoft to enable Siemens Industrial Copilot to handle the most demanding environments. The Siemens Industrial Copilot is a Generative AI-powered copilot designed to help automation engineers generate codes and diagnose faults.
Siemens recently closed the sale of Innomotics, which marks a step toward optimizing its portfolio. In September 2024, Siemens inked a deal to acquire Trayer Engineering to expand its grid modernization product offering. Also, Siemens Smart Infrastructure and E.ON Drive Infrastructure signed a global framework agreement to improve Europe's electric vehicle charging infrastructure.
In Smart Infrastructure, the company is seeing significant order growth on contributions from all businesses, most notably the electrification and buildings businesses. Order intake has been high, supported by strong demand from data center and energy customers. In Digital Industries, the industrial software business has won several large license contracts.
The Zacks Consensus Estimate for the Munich, Germany-based company’s fiscal 2024 earnings has been revised 1% upward in the past 30 days. The consensus mark indicates year-over-year growth of 10.2%. SIEGY has a trailing four-quarter earnings surprise of 10.2%, on average. The company has a long-term estimated earnings growth rate of 6% and currently flaunts a Zacks Rank #1 (Strong Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Grainger: The company continues to deliver robust results, aided by margin improvements in its segments and strong operating performance. GWW is well-poised to gain from efforts to increase its customer base through incremental marketing investments and effective marketing strategies. The High Touch Solutions North America segment will continue to benefit from pricing actions and volume growth. The Endless Assortment segment is gaining from customer acquisitions at its Zoro and MonotaRO businesses.
Cost-control measures undertaken by GWW will sustain margins. The company is also 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.
Lake Forest, IL-based Grainger is a broad-line, business-to-business distributor of MRO supplies, and other related products and services. The Zacks Consensus Estimate for 2024 earnings indicates growth of 5.5% from the prior-year reported number. GWW currently has a trailing four-quarter earnings surprise of 3.15%, on average. GWW has an estimated long-term earnings growth rate of 9.3% and a Zacks Rank #3 (Hold) at present.
SiteOne: The company is the largest and only national full-product line wholesale distributor of landscape supplies. SITE is three times larger than its closest competitor. The company remains focused on increasing its share from the current 17% of the $25 billion wholesale landscaping products distribution market. SiteOne has been enhancing its business through acquisitions to increase its customer base, broaden product lines and expand its geographic reach.
SITE made 11 acquisitions in 2023 and five so far in 2024. The company will also gain from its focus on cost reduction, driving operational excellence, product category management, enhancing supply-chain efficiency and strengthening pricing. SITE has been investing more in sophisticated information technology systems and data analytics.
The Zacks Consensus Estimate for Roswell, GA-based SiteOne’s earnings for 2024 indicates year-over-year growth of 3.2%. The estimate has remained unchanged in the past 30 days. SITE currently carries a Zacks Rank #3.
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Zacks Industry Outlook Siemens, W.W. Grainger and SiteOne Landscape Supply

The Zacks Industrial Services industry has been bearing the brunt of the prolonged contraction in the manufacturing sector as customers remain cautious about spending. Flared-up input costs have added to the woes.
Despite the current setback, the rise in e-commerce activities will be a key catalyst for the industry. Companies like Siemens SIEGY, W.W. Grainger, Inc. GWW and SiteOne Landscape Supply, Inc. SITE are positioned for growth by leveraging strategies to capitalize on this demand. The companies have also been focusing on lowering costs, increasing productivity and efficiency, and investing in automation and digitization, which will aid growth.
Industry Description
The Zacks Industrial Services industry comprises companies that provide industrial equipment products and MRO (maintenance, repair and operations) services. It includes routine maintenance, emergency maintenance and spare part inventory control, which keep a facility and its equipment in good operating condition. Industry participants serve a wide array of customers, ranging from commercial, government and healthcare to manufacturing. The industry's products (power tools, hand tools, cutting fluids, lubricants, personal protective equipment and consumables) are utilized in production and plant maintenance but are not directly related to customers’ core products or services. These companies reduce MRO supply-chain costs and improve customers' plant floor productivity by offering inventory management, and process and procurement solutions.
Trends Shaping the Future of the Industrial Services Industry
Extended Downturn in Manufacturing Activity is Concerning: The manufacturing sector contributes around 70% to the industry's revenues. Customer activity trends are historically correlated to changes in the Industrial Production Index. Per the Federal Reserve’s last update, industrial production was down 0.6% in the 12 months ended September 2024. The durable goods manufacturing index was down 1.9% during the period. The Institute for Supply Management’s manufacturing index had languished in contraction territory for a consecutive 16 months until February 2024. March saw a slight uptick to 50.3%, which ended the prolonged contraction. However, this was not sustained as the index slipped to the contraction territory again, with a 49.2% reading in April. It has been below 50% since then and was 47.2% in September. The average for the 12 months ended September 2024 is 48%. The New Orders index has also contracted for the sixth consecutive month in September. The index has not delivered consistent growth since the end of its 24-month expansion streak in May 2022. Some industry players have reported gradually easing supply-chain issues, with improvements in lead times. Once the situation normalizes, strong demand in the diverse end markets will drive the industry’s growth.
Pricing Actions to Combat High Costs: The industry has been experiencing significant inflation levels, including higher prices for labor, freight and fuel. The companies are witnessing labor shortages for some positions and incurring steep labor costs to meet demand. Industry players are focusing on pricing actions, cost-cutting measures, efforts to improve productivity and efficiency, and the diversification of the supplier base to mitigate some of these headwinds.
E-commerce to be a Growth Driver: MRO demand is significantly impacted by the evolution of e-commerce. Customer demand for highly tailored solutions, with real-time access to information and rapid delivery of products, is rising. Customers want to execute their business activities in the most efficient way possible, which often means online. According to Statista, global e-commerce sales are expected to see a compound annual growth rate (CAGR) of 9.5% between 2024 and 2029. Turkey is expected to lead the retail e-commerce development with a projected CAGR of 11.58% over this period, closely followed by Brazil and India. The U.S. retail e-commerce market is expected to cross the $1.5-trillion mark in 2026 and grow, seeing a CAGR of 9% between 2024 and 2029. To capitalize on this trend, industrial service companies are heavily investing in improving their digital capabilities and increasing their e-commerce share.
Zacks Industry Rank Indicates Dull Prospects
The group’s Zacks Industry Rank, basically the average of the Zacks Rank of all the member stocks, indicates bearish prospects in the near term. The Zacks Industrial Services Industry, a 19-stock group within the broader Zacks Industrial Products sector, currently carries a Zacks Industry Rank #158, which places it in the bottom 37% of 251 Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperforms the bottom 50% by a factor of more than 2 to 1.
Before we present a few Industrial services stocks that investors can add to their portfolio, it is worth taking a look at the industry’s stock-market performance and its valuation picture.
Industry Vs S&P 500 & Sector
The Industrial Services industry has underperformed its sector and the Zacks S&P 500 composite over the past year.
Over this period, the industry has gained 17.8% against the sector’s growth of 35%. The Zacks S&P 500 composite has moved up 39.4%.
One-Year Price Performance
Industry's Current Valuation
On the basis of the forward 12-month EV/EBITDA ratio, a commonly used multiple for valuing Industrial Services companies, we see that the industry is currently trading at 29.30X compared with the S&P 500’s 14.47X and the Industrial Products sector’s forward 12-month EV/EBITDA of 20.65X. This is shown in the charts below.
Enterprise Value/EBITDA (EV/EBITDA) F12M Ratio
Enterprise Value/EBITDA (EV/EBITDA) F12M Ratio
Over the last five years, the industry traded as high as 29.52X and as low as 6.04X, the median being 19.66X.
3 Industrial Services Stocks to Keep an Eye on
Siemens: The company has teamed up with ServiceNow to enhance industrial cybersecurity and drive the integration of generative AI into shopfloor operations. The company has also collaborated with Microsoft to enable Siemens Industrial Copilot to handle the most demanding environments. The Siemens Industrial Copilot is a Generative AI-powered copilot designed to help automation engineers generate codes and diagnose faults. Siemens recently closed the sale of Innomotics, which marks a step toward optimizing its portfolio. In September 2024, Siemens inked a deal to acquire Trayer Engineering to expand its grid modernization product offering. Also, Siemens Smart Infrastructure and E.ON Drive Infrastructure signed a global framework agreement to improve Europe's electric vehicle charging infrastructure. In Smart Infrastructure, the company is seeing significant order growth on contributions from all businesses, most notably the electrification and buildings businesses. Order intake has been high, supported by strong demand from data center and energy customers. In Digital Industries, the industrial software business has won several large license contracts.
The Zacks Consensus Estimate for the Munich, Germany-based company’s fiscal 2024 earnings has been revised 1% upward in the past 30 days. The consensus mark indicates year-over-year growth of 10.2%. SIEGY has a trailing four-quarter earnings surprise of 10.2%, on average. The company has a long-term estimated earnings growth rate of 6% and currently flaunts a Zacks Rank #1 (Strong Buy).
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Price & Consensus: SIEGY
Grainger: The company continues to deliver robust results, aided by margin improvements in its segments and strong operating performance. GWW is well-poised to gain from efforts to increase its customer base through incremental marketing investments and effective marketing strategies. The High Touch Solutions North America segment will continue to benefit from pricing actions and volume growth. The Endless Assortment segment is gaining from customer acquisitions at its Zoro and MonotaRO businesses. Cost-control measures undertaken by GWW will sustain margins. The company is also 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.
Lake Forest, IL-based Grainger is a broad-line, business-to-business distributor of MRO supplies, and other related products and services. The Zacks Consensus Estimate for 2024 earnings indicates growth of 5.5% from the prior-year reported number. GWW currently has a trailing four-quarter earnings surprise of 3.15%, on average. GWW has an estimated long-term earnings growth rate of 9.3% and a Zacks Rank #3 (Hold) at present.
Price & Consensus: GWW
SiteOne: The company is the largest and only national full-product line wholesale distributor of landscape supplies. SITE is three times larger than its closest competitor. The company remains focused on increasing its share from the current 17% of the $25 billion wholesale landscaping products distribution market. SiteOne has been enhancing its business through acquisitions to increase its customer base, broaden product lines and expand its geographic reach. SITE made 11 acquisitions in 2023 and five so far in 2024. The company will also gain from its focus on cost reduction, driving operational excellence, product category management, enhancing supply-chain efficiency and strengthening pricing. SITE has been investing more in sophisticated information technology systems and data analytics.
The Zacks Consensus Estimate for Roswell, GA-based SiteOne’s earnings for 2024 indicates year-over-year growth of 3.2%. The estimate has remained unchanged in the past 30 days. SITE currently carries a Zacks Rank #3.
Price & Consensus: SITE
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Siemens AG (SIEGY) : Free Stock Analysis Report
W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report
SiteOne Landscape Supply, Inc. (SITE) : Free Stock Analysis Report
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3 Industrial Services Stocks to Consider Amid Industry Challenges

W.W. Grainger (GWW) shares rallied 5.8% in the last trading session to close at $1,085.04. This move can be attributable to notable volume with a higher number of shares being traded than in a typical session. This compares to the stock's 2.8% gain over the past four weeks.
Shares of Grainger have been gaining on solid growth in both its segments. The company’s High-Touch Solutions North America (N.A.) 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 across the segment and repeat customer growth at MonotaRO.
Grainger’s strategic initiatives and efforts to increase market share across the business is driving growth. Grainger expects earnings per share of $38.00-$39.50 for 2024. The mid-point of the guidance indicates 6% growth from the 2023 reported figure. Grainger expects net sales between $17 billion and $17.3 billion. Sales growth is expected to be 3.2-5.2%. Daily sales growth is envisioned at 4-6%. Grainger’s initiatives and supply-chain advantages are likely to aid the company in meeting its guidance.
This seller of maintenance and other supplies is expected to post quarterly earnings of $9.98 per share in its upcoming report, which represents a year-over-year change of +5.8%. Revenues are expected to be $4.4 billion, up 4.6% from the year-ago quarter.
Earnings and revenue growth expectations certainly give a good sense of the potential strength in a stock, but empirical research shows that trends in earnings estimate revisions are strongly correlated with near-term stock price movements.
For W.W. Grainger, the consensus EPS estimate for the quarter has been revised marginally higher over the last 30 days to the current level. And a positive trend in earnings estimate revision usually translates into price appreciation. So, make sure to keep an eye on GWW going forward to see if this recent jump can turn into more strength down the road.
The stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
W.W. Grainger belongs to the Zacks Industrial Services industry. Another stock from the same industry, SiteOne Landscape (SITE), closed the last trading session 6.1% higher at $148.32. Over the past month, SITE has returned 3%.
SiteOne Landscape's consensus EPS estimate for the upcoming report has remained unchanged over the past month at $1.17. Compared to the company's year-ago EPS, this represents a change of -6.4%. SiteOne Landscape currently boasts a Zacks Rank of #3 (Hold).
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W.W. Grainger, Inc. (GWW) : Free Stock Analysis Report
SiteOne Landscape Supply, Inc. (SITE) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Indicator	TTM Median
P/E	48.85 21.57
Price/Sales	1.55 1.27
P/B	4.22 2.25
P/FCF	29.22 17.73

Indicator	TTM Median
ROE	9.22 15.62
ROA	4.68 6.45
ROI	6.94 9.56
Net Worth	6.95 1.27
Quick Ratio	1.17 1.16
Current Ratio	2.53 1.57

Indicator	TTM Median
Net Profit Margin	3.16 7.30
Operating Margin	4.81 10.18
Gross Margin	34.48 32.61
Return on tangible equity	18.47 25.97

Indicator	TTM Median
EPS	0.97 0.49
EPS Forecast	1.18 0.52
Revenue	1.21B 194.00M
Gross Profit	411.00M —
EBITDA	106.00M —

SiteOne Landscape Supply, Inc.

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