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Graco Inc GGG

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Morningstar’s Analysis

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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Graco Maintains Strong Momentum in Q1; Raising Fair Value Estimate

Analyst Note

| Krzysztof Smalec, CFA |

Wide-moat-rated Graco maintained its strong momentum in the first quarter, as revenue of $454 million and adjusted earnings per share of $0.58 both easily beat FactSet consensus estimates ($429 million and $0.50, respectively). We are raising our fair value estimate to $70 per share from $64 to reflect revenue growth in the contractor segment exceeding our previous expectations, an improving outlook in the industrial and process segments, and the time value of money since our previous update.

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Company Profile

Business Description

Graco manufactures equipment used for managing fluids, coatings, and adhesives, specializing in difficult-to-handle materials. Graco’s business is organized into three segments: industrial, process, and contractor. The Minnesota-based firm serves a wide range of end markets, including industrial, automotive, and construction, and its broad array of products include pumps, valves, meters, sprayers, and equipment used to apply coatings, sealants, and adhesives. The firm generated roughly $1.7 billion in sales and $410 million in operating income in 2020.

Contact
88-11th Avenue Northeast
Minneapolis, MN, 55413
T +1 612 623-6000
Sector Industrials
Industry Specialty Industrial Machinery
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 2,800

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