WESCO International Review Ahead of Investor Day

WESCO Int'l (NYSE:WCC) shares rose more than 12% since the company’s reported Q4 results on Tuesday, with EPS of $4.13, coming in better than the Street estimate of $3.79. Revenue was $5.6 billion, beating the Street estimate of $5.37 billion.

Backlog remains strong, up 44% year-over-year, with real Q4 revenue upside, including supply chain easing and incremental backlog execution (notably at CSS).

The company expects 2023 EPS in the range of $16.80–18.30 (vs. Street’s $16.94 estimate) on sales growth of 6–9%. The company remains committed to a $1 billion share repurchase through 2026, with activity picking up in the second half of 2023.

WESCO Int'l (NYSE:WCC) shares rose more than 12% since the company’s reported Q4 results on Tuesday, with EPS of $4.13, coming in better than the Street estimate of $3.79. Revenue was $5.6 billion, beating the Street estimate of $5.37 billion.

Backlog remains strong, up 44% year-over-year, with real Q4 revenue upside, including supply chain easing and incremental backlog execution (notably at CSS).

The company expects 2023 EPS in the range of $16.80–18.30 (vs. Street’s $16.94 estimate) on sales growth of 6–9%. The company remains committed to a $1 billion share repurchase through 2026, with activity picking up in the second half of 2023.

WESCO Int'l (NYSE:WCC) shares rose more than 12% since the company’s reported Q4 results on Tuesday, with EPS of $4.13, coming in better than the Street estimate of $3.79. Revenue was $5.6 billion, beating the Street estimate of $5.37 billion.

Backlog remains strong, up 44% year-over-year, with real Q4 revenue upside, including supply chain easing and incremental backlog execution (notably at CSS).

The company expects 2023 EPS in the range of $16.80–18.30 (vs. Street’s $16.94 estimate) on sales growth of 6–9%. The company remains committed to a $1 billion share repurchase through 2026, with activity picking up in the second half of 2023.

Analyst at Oppenheimer provided their key takeaways from WESCO International, Inc.’s (NYSE:WCC) management meeting, which was focused on the overall post-merger extensibility of scale benefits in distribution and digital/IT investment to drive margin and growth momentum into markets with secular drivers.

According to the analysts, digital investment remains a deal case centerpiece, with post-merger economies of scale enabling affordability ($120 million/year capex and opex investment in PP&E and IT vs. $90 million pre-merger pro forma).

The company's IT architecture includes best-fit vended products for each of front/middle/back-end solutions, with proprietary integration to establish tools and systems for a vast data pool tying information about suppliers, product inventory, and customer consumption to drive differentiated analytics and enable nonlinear benefits of scale.

RBC Capital analysts provided their views on WESCO International, Inc. (NYSE:WCC) ahead of the upcoming Investor Day on September 7.

The analysts expect the overarching theme to be how the company still has ample sparks for growth, including more self-help/revenue synergies from its successful Anixter integration, as well as an array of longer-term secular growth themes, such as the electrification of everything, grid hardening, infrastructure spending, automation, and EV charging.

The analysts expect the company to reiterate its 2022 guidance from Q2/22 earnings, which includes total sales growth of 16%-18%, adjusted EBITDA margins of 7.8%-8.0%, and adjusted EPS of $15.60-$16.40, compared to the Street estimate of $16.07.

While the analysts believe there is still an upside to both the sales and cost synergy targets from the Anixter acquisition, they mentioned that the company is more likely to emphasize revenue synergies.

WESCO International, Inc. (NYSE:WCC) reported its Q4 results, which came ahead of the Street estimates, driven by upside sales and margin strength. Q4 EPS came in at $3.17, compared to the consensus estimate of $2.52. Revenue was $4.9 billion, above the consensus estimate of $4.66 billion.

Analysts at RBC Capital believe the bull case in the company continues to track well, paced by the impressive beat, upside 2022 guidance, and another round of boosts to the revenue and cost synergy targets in the successful Anixter integration.

According to the analysts, deleveraging continues to be ahead of plan, and at 3.9x, the company is now below the psychological 4x threshold, on its way to its targeted 2.0x-3.5x in the second half of the year.

The sector trends continue to be in the company’s favor, including electrification, automation/IoT, grid modernization, and 24/7 connectivity. The analysts see ample upside from here, with valuation compellingly below its historical relative P/E support level. They raised the price target on the company’s shares to $163 from $158, while reiterating their outperform rating.