Grainger Earnings: Demand Continues to Moderate, but Industrial Production Remains Resilient

Our fair value estimate increased by 9% to $520 per share, following third-quarter earnings. We attribute 5 percentage points of the fair value increase to the time value of money since our last update, with the balance coming from upward adjustments to our long-term forecast. We also made slight tweaks to our 2023 sales and margin estimates, as management narrowed its full-year guidance. Even so, we still see shares trading at a 34% premium to our fair value estimate.