MSC Industrial Tops 1Q Street Estimates; Raymond James Sticks To Hold

MSC Industrial reported better-than-expected 1Q results on Wednesday sending shares of the MRO (metalworking and maintenance, repair and operations) products distributor up 1.2%.

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MSC Industrial’s (MSM) 1Q revenues of $771.9 million surpassed analysts’ expectations of $770.2 million. However, quarterly revenues fell 6.3% on a year-over-year basis.

Nevertheless, the company registered approximately 20% quarter-on-quarter growth in sales of janitorial and safety products. It also witnessed sequential improvement in sales of non-janitorial and non-safety product lines. (See MSM stock analysis on TipRanks)

MSC Industrial’s 1Q adjusted EPS declined 9.1% to $1.10 year-on-year but surpassed the consensus estimate of $1.08. The company noted that strong pricing and efficient purchasing led to a 30 basis point sequential improvement in 1Q gross margin.

Following the earnings release, Raymond James analyst Sam Darkatsh reiterated a Hold rating on the stock. In a note to investors, Darkatsh wrote, “Preliminary December ADS (Average Daily Sales) were comfortably above our FY2Q ADS assumption and consensus. The company reiterated the 2021 full-year operating margin framework, which remains in line with our estimates and consensus.”

Currently, the stock has an analyst consensus of a Hold based on 4 Holds and 1 Buy. The average price target of $84.25 implies upside potential of about 1.1% to current levels. Shares have gained by about 8.8% over the past year.