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MSC Industrial Direct Co Inc Class A MSM

Morningstar Rating
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Stock XNYS Rating as of
$80.02 +1.79 (2.29%)
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As of Delayed Price Pre-Open: $79.50 −0.50
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Company Report

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MSC Earnings: Softer End Market Demand and Execution Issues Weigh on Near-Term Results

Brian Bernard

MSC Industrial Direct’s fiscal third-quarter results (ended June 1) were in line with our expectations. Recall, on June 13, the company released preliminary third-quarter results and drastically cut fiscal 2024 financial guidance. Management’s prior guidance of 0%-5% average daily sales growth and 12.0%-12.8% adjusted operating margin was reduced to negative 4.3%-negative 4.7% revenue growth with a 10.5%-10.7% adjusted operating margin. See our June 14 analyst note for our commentary on third-quarter results and the change to 2024 guidance.

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Price vs Fair Value

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MSM is trading at a 29% premium.
Price
$80.02
Fair Value
$53.00
Uncertainty
Medium
1-Star Price
$441.29
5-Star Price
$12.20
Economic Moat
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Capital Allocation
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Bulls Say, Bears Say

Bulls

As end-market demand improves, MSC could return to mid- to high-single-digit sales growth and high-teens returns on invested capital.

Bears

MSC could continue to face gross margin pressure against a backdrop of soft demand, fierce competition, and execution issues.

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Trading Information

Previous Close Price
$78.23
Day Range
$76.80–80.42
52-Week Range
$75.05–105.77
Bid/Ask
$79.40 / $82.99
Market Cap
$4.49 Bil
Volume/Avg
105 / 584,584

Key Statistics

Price/Earnings (Normalized)
14.81
Price/Sales
1.16
Dividend Yield (Trailing)
4.10%
Dividend Yield (Forward)
4.15%
Total Yield
12.05%

Company Profile

MSC Industrial Direct is one of the largest industrial distributors with a focus on metalworking and maintenance, repair, and operations products and services. The company offers over 2 million products through its distribution network, which has 11 fulfillment centers. Although MSC has a presence in Canada, Mexico, and the United Kingdom, it primarily operates in the United States. In fiscal 2023, 95% of the firm’s $4.0 billion of sales was generated in the US.
Sector
Industrials
Industry
Industrial Distribution
Stock Style Box
Small Value
Total Number of Employees
7,377
Website
https://www.mscdirect.com

Competitors

Valuation

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Metric
MSM
WCC
FAST
Price/Earnings (Normalized)
 14.8111.9731.16
Price/Book Value
 3.211.6110.48
Price/Sales
 1.160.374.87
Price/Cash Flow
 11.048.9327.08
Price/Earnings
No chart available

Financial Strength

Metric
MSM
WCC
FAST
Quick Ratio
 0.761.202.27
Current Ratio
 2.082.214.83
Interest Coverage
 17.053.31171.42
Quick Ratio
No chart available

Profitability

Metric
MSM
WCC
FAST
Return on Assets (Normalized)
 12.17%4.52%25.54%
Return on Equity (Normalized)
 21.36%14.11%34.39%
Return on Invested Capital (Normalized)
 16.07%9.05%29.53%
Return on Assets
No chart available
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