Key Stats for Wesco Stock
- Price Change: -7.0%
- Current Price: ~$280
- Street Target: $296
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What Happened?
Wesco International (WCC) tumbled 7.0% to close near $280 on Tuesday.
They suffered a sharp pullback as investors reacted negatively to the company’s latest earnings report.
While revenue came in strong thanks to booming demand from data centers, the company missed profit expectations, reporting EPS of $3.40 versus the consensus estimate of $3.89.
The margin squeeze was the primary culprit.
Despite sales growing in its Communications and Security Solutions (CSS) segment, higher supply chain costs and a mix shift towards lower-margin projects weighed on the bottom line.
Investors were spooked by the disconnect between top-line growth and bottom-line contraction.
While the data center business grew 50% for the full year, the market is concerned that Wesco is “buying growth” at the expense of profitability.
Analysts at Baird noted that while the long-term secular trends in electrification and AI are intact, the near-term execution issues are creating an overhang on the stock.
With the stock trading at a discount to peers, the market is waiting for evidence that margins can stabilize before rewarding the company for its data center exposure.
See analysts’ growth forecasts and price targets for Wesco stock (It’s free!) >>>
Is Wesco Undervalued Today?
During the earnings call, CEO John Engel defended the company’s position in the AI revolution.
He stated: “40% of CSS’ sales are data centers… that grew 18% in Q3. We serve the hyperscaler data center companies direct.”
Engel also highlighted the massive opportunity in power infrastructure: “Total electricity demand in the U.S. in 2024 was flat to 2007… If you look at the power demand curve 3, 5, 7, 10 years out from now, no way… It is secular growth.”
However, the market remains focused on the immediate margin pressure, as reflected in the cautious analyst targets.
Read the full Wesco Transcript on TIKR to see the 2026 Roadmap >>>
According to the Street Consensus, the stock offers limited upside until execution improves.
- Street Target: $297
- Current Price: ~$281
- Potential Upside: +5.7%
Valuation Deep Dive
The investment case for Wesco is a “margin recovery” play.
With the stock trading at ~$280, the market is pricing in the margin headwinds, and the $296 target implies that analysts see only a modest rebound.
- The Data Center Tailwind: Wesco is a key beneficiary of the AI buildout, but investors need to see this translate into higher margins, not just higher revenue.
- The Valuation Discount: Trading at a lower multiple than pure-play electrical distributors, Wesco offers value, but it’s a “value trap” until earnings momentum returns.
- The Execution Risk: The $296 target reflects the risk that supply chain complexities and project mix continue to pressure profitability throughout 2026.
If Wesco can demonstrate margin expansion in the coming quarters, the path to $296 could be just the beginning, but the burden of proof is on management.
Conclusion: A wait-and-see story. With only 5.7% upside potential to the Street target, Wesco remains a hold for investors waiting for the “profitless growth” narrative to shift.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
