WESCO International (WCC) is one of the largest distributors of electrical products in the U.S. The company’s third quarter results beat the Zacks consensus.
WESCO’s strong market position, the turnaround in the industrial and utility markets, gradual recovery in the construction market, the global account model, restructuring benefits and the LEAN initiative are positive factors. WESCO’s results bear a positive correlation to GDP growth and current operating margins lag the company’s target by far.
However, we think that margins will respond to a pickup in key end-markets, signs of which are already evident. Consequently, we are upgrading the shares to Outperform.