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Graco Inc. (GGG) Gains But Lags Market: What You Should Know

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In the latest trading session, Graco Inc. (GGG) closed at $64, marking a +0.46% move from the previous day. The stock lagged the S&P 500's daily gain of 0.95%. Meanwhile, the Dow gained 0.8%, and the Nasdaq, a tech-heavy index, lost 0.25%.

Coming into today, shares of the company had gained 4.12% in the past month. In that same time, the Industrial Products sector gained 2.6%, while the S&P 500 gained 0.1%.

Wall Street will be looking for positivity from Graco Inc. as it approaches its next earnings report date. On that day, Graco Inc. is projected to report earnings of $0.68 per share, which would represent year-over-year growth of 9.68%. Our most recent consensus estimate is calling for quarterly revenue of $537.53 million, up 5.99% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $2.64 per share and revenue of $2.12 billion, which would represent changes of +8.2% and +6.72%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for Graco Inc.These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.64% lower within the past month. Graco Inc. is holding a Zacks Rank of #3 (Hold) right now.

In terms of valuation, Graco Inc. is currently trading at a Forward P/E ratio of 24.11. For comparison, its industry has an average Forward P/E of 18.16, which means Graco Inc. is trading at a premium to the group.

Also, we should mention that GGG has a PEG ratio of 3.01. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Manufacturing - General Industrial was holding an average PEG ratio of 1.69 at yesterday's closing price.

The Manufacturing - General Industrial industry is part of the Industrial Products sector. This group has a Zacks Industry Rank of 101, putting it in the top 40% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


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