MSC Industrial Direct (MSM) earnings: time to recover?

5:43 pm ET, 01 Jul 2018

MSC Industrial Direct Company, Inc. (MSM) is expected to report earnings on July 11 before the market open. The report will be for the fiscal quarter ending May 2018.  The shares are trading at $84.85, down -0.38%.

What are the MSM earnings expectations?  What news will the market be watching out for?  

The share price of MSC Industrial has lagged that of peers such as Grainger (GWW) and Fastenal (FAST), and also that of suppliers such as Kennametal (KMT)The market is wondering whether MSC Industrial's issues are predominantly driven by cyclical factors or increased online competition from Amazon (AMZN), which is expanding into industrial distribution and is altering price transparency and competitive balance.

MSC Industrial saw some long-awaited price leverage, but the organic growth rate seems light compared to its multiyear highs.  Hiring more reps should help MSC Industrial, but the risk remains that price transparency and online competition have whittled away its competitive advantage.

Double-digit free cash flow growth still supports a long-term annualized return of 10%, but the company really needs to accelerate its organic growth and improve its margin.

MSC Industrial Direct Co. Inc., has a mixed history of beating analysts’ earnings estimates.  In the past four quarters, the company: 

  • Delivered on the analyst EPS estimate ($1.09 actuals vs. $1.09 forecast) in FQ3’17;
  • Beat analyst EPS estimate by 8 cents ($1.07 actuals vs. $.99 forecast) in FQ4’17;
  • Missed analyst EPS estimate by 1 cent ($1.05 actuals vs. $1.06 forecast) in FQ1’18;
  • Missed analyst EPS estimate by 27 cents ($1.04 actuals vs. $1.31 forecast) in FQ2’18;

For FQ3’18, EPS is expected to grow by 28% year-over-year to $1.39, while revenue is expected to grow 12% year-over-year to $832 million.  


Over the last month, MSC Industrial Direct Company, Inc. (MSM) returned -5.74%. .

MSC Industrial Direct Company, Inc. (MSM) short share of float is 5.3%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock.

MSC Industrial Direct Company, Inc. (MSM) average analyst price target ($104.08) is 22.66% above its current price ($84.85).

For the latest price and information on MSC Industrial Direct Company, Inc., please visit Finstead and search for "MSM price" or "MSM news".

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

MSC Industrial Direct Company, Inc. (MSM) Stock Guide

Updated at: 12:51 pm ET, 12 Jul 2020

Before we start: if you're looking for MSM stock price, you can quickly find it out by visiting Finny and typing "MSM quote". If you're looking for a quick scoop on MSM stock (chart, price target, market cap, news and buy or sell analysis), go to Finny and look for "MSM". You'll get all this info in one place. Or you can just type "MSM news" to get the latest stock news.

Looking to buy or sell MSC Industrial Direct Company, Inc. (MSM)? Interested in getting the full scoop on MSM, including earnings and dividends, stock forecast, buy or sell analysis and key stats? If so, you came to the right place.

In this MSM stock guide, we'll address key questions about MSM, above and beyond what you can find on Yahoo Finance, Zacks, MarketWatch or Morningstar.

Here is what you'll be able to find in this guide:

Earnings and Dividends: earnings, earnings date, dividend rate and dividend yield;
Analyst Predictions: stock forecast and analyst ratings;
Analysis: Finny Score and buy or sell analysis;
Key Stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio, industry, sector, and number of employees.

And here is the list of questions we'll answer:
1. What are MSM earnings?
2. When is MSM earnings date?
3. What is MSM dividend?
4. What is MSM dividend yield?
5. What is MSM stock forecast (i.e., prediction)?
6. MSM buy or sell? What is MSM Finny Score?
7. What are the reasons to buy MSM? Why should I buy MSM stock?
8. What are the reasons to sell MSM? Why should I sell MSM stock?
9. What are MSM key stats: revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

So let's start. Scroll down to the question that interests you the most.

Earnings and Dividends

1. What are MSM earnings?

MSM trailing 12-month earnings per share (EPS) is $4.82.

2. When is MSM earnings date?

MSM earnings date is July 08, 2020.

3. What is MSM dividend?

MSM forward dividend is $3.00.

4. What is MSM dividend yield?

MSM forward dividend yield is 5.11%.

Analyst Predictions

5. What is MSM stock forecast (i.e., prediction)?

Based on MSM analyst price targets, MSM stock forecast is $62.83 (for a year from now). That means the average analyst price target for MSM stock is $62.83. The prediction is based on 18 analyst estimates.

The low price target for MSM is $50.00, while the high price target is $70.00.

MSM analyst rating is Hold.

Analysis

6. MSM buy or sell? What is MSM Finny Score?

#{finnyScore:25}Our quantitative analysis shows 2 reasons to buy and 6 reasons to sell MSM, resulting in Finny Score of 25.

7. What are the reasons to buy MSM? Why should I buy MSM stock?

Here are the reasons to buy MSM stock:

  • As end market demand and pricing improve, MSC could return to double-digit growth and mid- to high-teen operating margins.
  • MSC’s national scale and focus on value-added inventory management services should help the firm take market share from smaller regional and local distributors.
  • MSC generates consistent free cash flow and runs a shareholder friendly capital allocation strategy. The company should continue to utilize its free cash flow to grow its regular dividend, repurchase shares, and occasionally pay special dividends.
  • MSM profitability is improving. The YoY profit margin change was 2.25 percentage points. See MSM profitability chart.
  • MSM forward dividend yield is 5.11%, higher than the industry (0.54%) and sector (0.50%) forward dividend yields. See MSM forward dividend chart.

8. What are the reasons to sell MSM? Why should I sell MSM stock?

Let's look at the reasons to sell MSM stock (i.e., the bear case):

  • MSC could face gross margin headwinds as national accounts become a larger part of the firm’s business.
  • Amazon Business could disrupt the industrial distribution industry, taking market share and pressuring margins.
  • The company’s niche in American manufacturing, particularly metalworking, could put the firm at risk if efforts to keep these industries in America fail.
  • MSM quarterly revenue growth was -4.50%, lower than the industry and sector average revenue growth (3.63% and 1.65%, respectively). See MSM revenue growth chart.
  • MSM PEG ratio (P/E adjusted for growth) is 10.12, which is high compared to its industry peers’ PEG ratios. See MSM PEG chart.
  • MSM average analyst price target ($62.83) is below its current price ($64.64). See MSM price target chart.
  • MSM short share of float is 4.62%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See MSM short share of float chart.
  • MSM short interest (days to cover the shorts) ratio is 2.29. The stock garners more short interest than the average industry, sector or S&P 500 stock. See MSM short interest ratio chart.
  • MSM cash to debt ratio is 0.06, lower than the average industry (0.12) and sector (0.12) cash to debt ratio. See MSM cash to debt chart.

Key Stats

9. What are MSM key stats : revenue, market cap, revenue growth, profit margin, P/E ratio, P/B ratio industry, sector, and number of employees?

Let's look at the key statistics for MSM:

Metrics MSM
Price $68.04
Average Price Target / Upside $62.83 / -7.66%
Average Analyst Rating Hold
Forward Dividend Yield 5.11%
Industry Industrial Distribution
Sector Industrials
Number of Employees 6,657
Market Cap $3.26B
Forward P/E Ratio 14.36
Price/Book Ratio 0.98
Revenue (TTM) $3.32B
YoY Quarterly Revenue Growth -4.50%
Profit Margin 8.05%

If you liked this analysis, check out Stock Guides for other stocks.

Disclaimer: The news article above expresses the author’s opinion about the topic of the article. We strongly advise you not to base your investment decisions just on this article alone. If you’d like to become a writer for Finny Bites, please send us an email at hi@askfinny.com.

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