Loop Capital has reduced its price target for Wesco (WCC, Financial) from $250 to $220, while maintaining a Buy rating on the stock. According to the firm, Wesco's exceptional expansion in the datacenter sector is contributing significantly to its robust performance. The company now anticipates sales to exceed the midpoint of its guidance range.
Despite facing challenges such as project mix and competitive pressure affecting gross margins, Loop Capital remains confident in Wesco's potential to meet expectations. Additionally, the firm notes that the company's strategies for cash deployment and price increases could provide further upside for (WCC, Financial).
Wall Street Analysts Forecast
Based on the one-year price targets offered by 10 analysts, the average target price for WESCO International Inc (WCC, Financial) is $200.20 with a high estimate of $230.00 and a low estimate of $163.00. The average target implies an upside of 23.69% from the current price of $161.85. More detailed estimate data can be found on the WESCO International Inc (WCC) Forecast page.
Based on the consensus recommendation from 12 brokerage firms, WESCO International Inc's (WCC, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for WESCO International Inc (WCC, Financial) in one year is $171.99, suggesting a upside of 6.27% from the current price of $161.85. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the WESCO International Inc (WCC) Summary page.
WCC Key Business Developments
Release Date: May 01, 2025
- Organic Sales Growth: 6% in the first quarter, driven by data center, broadband, and OEM businesses.
- Data Center Business Growth: Up 70% year-over-year.
- Gross Margin: Stable sequentially, down 20 basis points year-over-year.
- Adjusted EBITDA Margin: Down 60 basis points year-over-year.
- Adjusted Earnings Per Share: $2.21, down 4% from the prior year.
- Free Cash Flow: $9 million, exceeding expectations.
- Senior Notes Issuance: $800 million to redeem preferred stock and repay credit facility.
- Utility and Broadband Solutions Sales: Organic sales down 5%, reported sales down 19% due to divestiture.
- CSS Sales Growth: Up 18% organically, driven by data center solutions.
- Backlog Growth: Up sequentially in all three business units.
- 2025 Outlook: Reaffirmed, with expectations for above midpoint sales and below midpoint EBITDA margin.
- Free Cash Flow Outlook for 2025: $600 million to $800 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- WESCO International Inc (WCC, Financial) reported 6% organic sales growth in the first quarter, exceeding expectations.
- The data center business experienced a 70% growth, contributing significantly to overall sales.
- The company issued $800 million in senior notes to redeem preferred stock, strengthening the balance sheet and improving financial flexibility.
- WESCO International Inc (WCC) has a strong liquidity position, allowing for significant capital allocation flexibility.
- The company is seeing positive sales momentum continuing into the second quarter, with backlog up in all business units.
Negative Points
- Utility end markets showed continued temporary weakness, impacting overall growth.
- Adjusted EBITDA margin was down 60 basis points year-over-year due to project and product mix.
- SG&A expenses increased by 2% year-over-year, driven by inflationary pressures.
- The company is facing potential impacts from global tariffs, which could affect supply chain and pricing.
- Gross margin is expected to be down slightly for the full year compared to 2024.
