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WESCO International, Inc. (WCC) Soars to 52-Week High, Time to Cash Out?
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Have you been paying attention to shares of Wesco International (WCC - Free Report) ? Shares have been on the move with the stock up 30.3% over the past month. The stock hit a new 52-week high of $172.91 in the previous session. Wesco International has gained 37.4% since the start of the year compared to the 14.4% move for the Zacks Computer and Technology sector and the 23.9% return for the Zacks Electronics - Parts Distribution industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 14, 2023, Wesco International reported EPS of $4.13 versus consensus estimate of $3.81.
For the current fiscal year, Wesco International is expected to post earnings of $17.08 per share on $22.84 billion in revenues. This represents a 4.02% change in EPS on a 6.63% change in revenues. For the next fiscal year, the company is expected to earn $18.29 per share on $23.08 billion in revenues. This represents a year-over-year change of 7.07% and 1.06%, respectively.
Valuation Metrics
Wesco International may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Wesco International has a Value Score of B. The stock's Growth and Momentum Scores are C and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 10.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 9X. On a trailing cash flow basis, the stock currently trades at 11.8X versus its peer group's average of 8.5X. Additionally, the stock has a PEG ratio of 1.01. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Wesco International currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Wesco International passes the test. Thus, it seems as though Wesco International shares could have a bit more room to run in the near term.
How Does WCC Stack Up to the Competition?
Shares of WCC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Arrow Electronics, Inc. (ARW - Free Report) . ARW has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Arrow Electronics, Inc. beat our consensus estimate by 0.18%, and for the current fiscal year, ARW is expected to post earnings of $15.78 per share on revenue of $33.39 billion.
Shares of Arrow Electronics, Inc. have gained 9.1% over the past month, and currently trade at a forward P/E of 7.84X and a P/CF of 4.49X.
The Electronics - Parts Distribution industry is in the top 4% of all the industries we have in our universe, so it looks like there are some nice tailwinds for WCC and ARW, even beyond their own solid fundamental situation.
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WESCO International, Inc. (WCC) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Wesco International (WCC - Free Report) ? Shares have been on the move with the stock up 30.3% over the past month. The stock hit a new 52-week high of $172.91 in the previous session. Wesco International has gained 37.4% since the start of the year compared to the 14.4% move for the Zacks Computer and Technology sector and the 23.9% return for the Zacks Electronics - Parts Distribution industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 14, 2023, Wesco International reported EPS of $4.13 versus consensus estimate of $3.81.
For the current fiscal year, Wesco International is expected to post earnings of $17.08 per share on $22.84 billion in revenues. This represents a 4.02% change in EPS on a 6.63% change in revenues. For the next fiscal year, the company is expected to earn $18.29 per share on $23.08 billion in revenues. This represents a year-over-year change of 7.07% and 1.06%, respectively.
Valuation Metrics
Wesco International may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Wesco International has a Value Score of B. The stock's Growth and Momentum Scores are C and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 10.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 9X. On a trailing cash flow basis, the stock currently trades at 11.8X versus its peer group's average of 8.5X. Additionally, the stock has a PEG ratio of 1.01. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Wesco International currently has a Zacks Rank of #2 (Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Wesco International passes the test. Thus, it seems as though Wesco International shares could have a bit more room to run in the near term.
How Does WCC Stack Up to the Competition?
Shares of WCC have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is Arrow Electronics, Inc. (ARW - Free Report) . ARW has a Zacks Rank of # 2 (Buy) and a Value Score of A, a Growth Score of B, and a Momentum Score of C.
Earnings were strong last quarter. Arrow Electronics, Inc. beat our consensus estimate by 0.18%, and for the current fiscal year, ARW is expected to post earnings of $15.78 per share on revenue of $33.39 billion.
Shares of Arrow Electronics, Inc. have gained 9.1% over the past month, and currently trade at a forward P/E of 7.84X and a P/CF of 4.49X.
The Electronics - Parts Distribution industry is in the top 4% of all the industries we have in our universe, so it looks like there are some nice tailwinds for WCC and ARW, even beyond their own solid fundamental situation.