MSC Industrial Direct (NYSE:MSM) Posts Quarterly Earnings Results, Beats Estimates By $0.15 EPS

MSC Industrial Direct (NYSE:MSM) issued its earnings results on Wednesday. The industrial products company reported $1.43 earnings per share (EPS) for the quarter, topping analysts’ consensus estimates of $1.28 by $0.15, FiscalAI reports. The business had revenue of $1.05 billion during the quarter, compared to analysts’ expectations of $1.03 billion. MSC Industrial Direct had a return on equity of 17.34% and a net margin of 5.91%.The company’s revenue for the quarter was up 7.8% on a year-over-year basis. During the same quarter in the previous year, the business earned $1.08 EPS.

Here are the key takeaways from MSC Industrial Direct’s conference call:

• MSC reported fiscal Q3 sales of $1.047 billion, up 7.8% year over year, with average daily sales beating expectations and management saying the quarter was better than planned.
• Adjusted operating margin improved to 10.6%, helped by lower operating expenses as a percentage of sales and productivity actions; adjusted EPS rose 32% year over year to $1.43.
• Management said it is seeing early signs of volume improvement across the business, including stronger core customer demand, improving national accounts, and better trends in vending and implant programs.
• The company raised its focus on cost structure and productivity, saying it is still targeting a mid-teens operating margin over time and benchmarking itself against a gap of roughly 1,000 heads versus peers.
• For fiscal Q4, MSC guided to 6.5% to 8.5% average daily sales growth and adjusted operating margin of 10.0% to 10.8%, while noting price will remain a meaningful driver and volume should improve modestly despite tougher comparisons.

MSC Industrial Direct Stock Performance

Shares of MSM opened at $123.06 on Friday. MSC Industrial Direct has a 52 week low of $78.80 and a 52 week high of $127.51. The company has a debt-to-equity ratio of 0.06, a quick ratio of 0.78 and a current ratio of 1.55. The company has a market capitalization of $6.87 billion, a PE ratio of 29.72 and a beta of 0.83. The company’s 50 day moving average price is $110.65 and its 200 day moving average price is $97.11.

MSC Industrial Direct Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Wednesday, July 22nd. Investors of record on Wednesday, July 8th will be issued a dividend of $0.87 per share. This represents a $3.48 annualized dividend and a dividend yield of 2.8%. The ex-dividend date is Wednesday, July 8th. MSC Industrial Direct’s dividend payout ratio (DPR) is currently 93.55%.

Hedge Funds Weigh In On MSC Industrial Direct

Institutional investors have recently bought and sold shares of the stock. Quarry LP raised its position in shares of MSC Industrial Direct by 71.7% during the third quarter. Quarry LP now owns 503 shares of the industrial products company’s stock valued at $46,000 after buying an additional 210 shares during the last quarter. Kestra Advisory Services LLC bought a new position in MSC Industrial Direct during the fourth quarter valued at about $48,000. EverSource Wealth Advisors LLC lifted its position in shares of MSC Industrial Direct by 130.4% in the 2nd quarter. EverSource Wealth Advisors LLC now owns 576 shares of the industrial products company’s stock worth $49,000 after acquiring an additional 326 shares during the period. NewEdge Advisors LLC grew its holdings in shares of MSC Industrial Direct by 79.9% during the 1st quarter. NewEdge Advisors LLC now owns 750 shares of the industrial products company’s stock worth $58,000 after purchasing an additional 333 shares in the last quarter. Finally, UMB Bank n.a. increased its position in shares of MSC Industrial Direct by 36.2% during the fourth quarter. UMB Bank n.a. now owns 715 shares of the industrial products company’s stock valued at $60,000 after purchasing an additional 190 shares during the period. 79.26% of the stock is currently owned by institutional investors.

Key Stories Impacting MSC Industrial Direct

Here are the key news stories impacting MSC Industrial Direct this week:

• Positive Sentiment: MSC Industrial beat Wall Street estimates with fiscal Q3 adjusted EPS of $1.43 and revenue of about $1.05 billion, helped by price gains and a return to volume growth, which points to improving operating momentum. MSC Industrial Q3 Earnings Beat on Price Gains & Volume Growth
• Positive Sentiment: DA Davidson raised its price target on MSC Industrial Direct to $150 from $145 and reiterated a buy rating, signaling confidence that shares still have room to run. Benzinga / The Fly report
• Positive Sentiment: Zacks upgraded MSC Industrial to Rank #2 (Buy), citing improving earnings expectations and reinforcing the bullish post-earnings sentiment. What Makes MSC Industrial (MSM) a New Buy Stock
• Positive Sentiment: Management and commentary around the earnings call suggest the turnaround is progressing, with improving volume trends, a reset cost structure, and guidance pointing to continued sales gains. MSM Q3 Earnings Call Shows Early Gains in Volume, Cost Reset
• Neutral Sentiment: The stock also appears to be benefiting from broader investor enthusiasm after reaching new highs, as the market continues to price in a stronger industrial recovery. MSC Industrial: A Broadening Industrial Recovery Is Driving Shares To New Highs

Analysts Set New Price Targets

MSM has been the topic of several analyst reports. Jefferies Financial Group set a $130.00 target price on MSC Industrial Direct in a report on Wednesday. Weiss Ratings upgraded MSC Industrial Direct from a “hold (c)” rating to a “hold (c+)” rating in a report on Tuesday, June 23rd. KeyCorp increased their price objective on shares of MSC Industrial Direct from $132.00 to $145.00 and gave the company an “overweight” rating in a research report on Wednesday. Finally, DA Davidson boosted their price objective on shares of MSC Industrial Direct from $145.00 to $150.00 and gave the stock a “buy” rating in a report on Thursday. Two investment analysts have rated the stock with a Buy rating and five have assigned a Hold rating to the company. Based on data from MarketBeat, the stock presently has an average rating of “Hold” and a consensus price target of $118.17.

About MSC Industrial Direct

MSC Industrial Direct Co, Inc (NYSE: MSM) is a leading distributor of metalworking and maintenance, repair and operations (MRO) products serving a broad range of industrial customers across North America. The company offers an extensive portfolio of cutting tools, abrasives, measuring and inspection instruments, fasteners, safety supplies and other essential components used in manufacturing, metalworking and production environments. MSC delivers products through a multi-channel distribution network, including an extensive branch system, e-commerce platform and dedicated sales force.

In addition to its core product offerings, MSC Industrial Direct provides value-added services designed to improve productivity and reduce downtime for its customers.