Is WW Grainger Inc (GWW) overvalued?
On Equity Rank's model estimate, GWW trades 19% above its fair value. WW Grainger Inc (GWW) last closed at $1,440.70; the multi-method model fair value is $1,208.92.
| Price | Model fair value | Price vs model |
|---|---|---|
| $1440.70 | $1208.92 | 19% above |
What the answer rests on
- 0 of 10 valuation methods put GWW's value above its price and 10 put it below, so the methods mostly agree.
- To justify today's price, GWW's free cash flow would need to grow about 18.8% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 7.3% a year.
- GWW trades at 38.0 times its last year's earnings, against a median of 24.8 for 187 profitable Industrials companies.
- Over the past year the price sat below the model fair value on 0% of trading days. The gap ranged from 8% above to 54% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind GWW's fair value · What prices assume · Other companies