WCC stock looks like a buy according to Barron’s in an article published on January 29, 2022.
Wesco’s stock looking like a buy, Barron’s says
Demand for cloud computing, power from renewable sources, and electric vehicles, along with more extreme weather events, means that electrical infrastructure will need extensive investment for years to come. That’s just one of many reasons to hold shares of Wesco International, Al Root writes in this week’s edition of Barron’s. Wesco stock, at a recent $119, is down 10% this year, having been punished along with many other small-cap shares. The drop, while painful for shareholders, also provides an attractive entry point, the author says. Source: https://www.barrons.com/articles/buy-wesco-stock-wcc-51643415466?mod=past_editions
WESCO International, Inc. Reports Third Quarter 2021 Results
Back on November 4, 2021, Wesco reported its Q3 2021 results. Wesco reported Q3 adjusted EPS of $2.74, versus the consensus estimate of $2.55. The company reported Q3 revenue of $4.7B versus which was in line with the consensus estimate.
- Record net sales of $4.7 billion, up 14.2% YOY
- Organic sales growth of 13.6%
- Sequential growth of 2.9% on a reported basis; 3.4% on an organic basis
- Record backlog as of September 30, 2021
- Record operating profit of $229.5 million; operating margin of 4.9%
- Record gross margin of 21.3%, up 170 basis points YOY and up 30 basis points sequentially
- Adjusted operating profit of $280.4 million; adjusted operating margin of 5.9%, up 110 basis points YOY
- Adjusted EBITDA of $330.3 million; adjusted EBITDA margin of 7.0%, up 31% and 90 basis points YOY
- Record net income attributable to common stockholders of $105.2 million
- Adjusted net income attributable to common stockholders of $142.6 million, up 71% YOY
- Earnings per diluted share of $2.02
- Adjusted earnings per diluted share of $2.74, up 65% YOY
- Leverage of 4.1x; improvement of 0.4x sequentially and 1.6x post-close of the Anixter merger
- Trailing twelve months adjusted EBITDA of $1,067.4 million
- Raising 2021 outlook for adjusted earnings per diluted share to a range of $9.20 to $9.40
“We had another exceptional quarter and again delivered outstanding results across the board. Early in the second year of our transformational combination of WESCO and Anixter, the substantial value creation of the new WESCO is building,” said John Engel, Chairman, President and CEO. “Our sales growth accelerated versus 2019 pre-pandemic levels, and our margin performance and backlog achieved new records for the company. We are outperforming the market across our three business units by utilizing our increased scale, expanded portfolio and industry-leading positions. And, we are continuing to de-lever our balance sheet at a rapid rate while investing in our digital transformation. The impressive progress we’re making in the integration is a direct result of the dedication, commitment and relentless execution of the entire WESCO team. I want to thank all our associates for their strong teamwork on our transformation, supplier engagement and customer focus in providing the products, services and resilient supply chain solutions our customers need.”
Mr. Engel continued, “We are seeing sales and margin momentum in each of our three strategic business units. Based on our strong third-quarter results, we are raising our full-year 2021 outlook for sales, margin and profitability for the third time this year. We now expect sales to increase 11% to 13%, adjusted EBITDA margin to expand to between 6.4% and 6.5%, and adjusted EPS to grow to a range of $9.20 to $9.40. As a result of our expected sales growth and increasing inventories to support our customers, we are also adjusting our full-year 2021 outlook for free cash flow to approximately 80% of net income.”
Mr. Engel added, “We are transforming into a growth company as a result of our digital investments, cross-selling our expanded portfolio of products and services, and providing resilient and sustainable supply chain solutions for our customers around the world. Continued execution of our aggressive integration plan, and capitalizing on the secular growth trends, will only accelerate this shift. The value creation potential of the new WESCO is building, and we are only in the early days.”
📺 WESCO Lighting Announcement
📉 WCC Stock Technical Analysis
The short-term trend is negative, the long-term trend is neutral. WCC is part of the Trading Companies & Distributors industry. There are 59 other stocks in this industry. WCC outperforms 76% of them. WCC is currently trading in the middle of its 52-week range. This is in line with the S&P500 Index, which is also trading in the middle of its range.
There is a support zone ranging from 118.39 to 118.87. This zone is formed by a combination of multiple trend lines in multiple time frames. There is also support at 115.32 from a horizontal line in the daily time frame.
There is resistance at 119.45 from a horizontal line in the daily time frame. There is also a resistance zone ranging from 134.26 to 134.45. This zone is formed by a combination of multiple trend lines in multiple time frames.
WCC has a poor technical rating and the quality of the setup is also only medium at the moment. WCC stock has a Setup Rating of 5 out of 10. Price movement has been a little bit too volatile to find a nice entry and exit point. It is probably a good idea to wait for a consolidation first. Click here to sign up for email alerts on when WCC stock consolidates and has a Setup Rating of 8 or higher.