Subdued Growth No Barrier To W.W. Grainger, Inc.’s (NYSE:GWW) Price
When close to half the companies in the United States have price-to-earnings ratios (or “P/E’s”) below 17x, you may consider W.W. Grainger, Inc. (NYSE:GWW) as a stock to avoid entirely with its 27.3x P/E ratio. However, the P/E might be quite high for a reason and it requires further investigation to determine if it’s justified.
Recent earnings growth for W.W. Grainger has been in line with the market. One possibility is that the P/E is high because investors think this modest earnings performance will accelerate. You’d really hope so, otherwise you’re paying a pretty hefty price for no particular reason.
