Using the PEG framework with analyst consensus forward EPS growth of 13.1% plus 0.9% dividend yield, W.W. Grainger, Inc. has a fair value of $569.00 based on NTM EPS (FY2026) of $43.58. The current PEG ratio is 1.88.
PEG < 1 = bargain, 1–1.5 = fair, > 2 = expensive.
PEG works well for steady growers with predictable earnings.
| EPS Growth RateForward | 12.1% |
| Dividend Yield | +0.9% |
| Adjusted Growth (clamped 8–25%) | 13.1% |
| Fair P/E | 13.1x |
| NTM EPS (FY2026) | $43.58 |
| Fair Value | $569.00 |
| Period | EPS Est. | Growth | Analysts |
|---|---|---|---|
| FY2025 (actual) | $35.40 | — | — |
| FY2026E | $43.58 | +23.1% | 15 |
| FY2027E | $48.38 | +11.0% | 14 |
| FY2028E | $52.33 | +8.2% | 8 |
| FY2029E | $55.97 | +6.9% | 7 |
4Y Forward EPS CAGR: 12.1%
| Year | Net Income | EPS | YoY |
|---|---|---|---|
| FY2021 | $1.0B | $19.98 | — |
| FY2022 | $1.5B | $30.27 | +51.5% |
| FY2023 | $1.8B | $36.51 | +20.6% |
| FY2024 | $1.9B | $38.71 | +6.0% |
| FY2025 | $1.7B | $35.40 | -8.6% |
4Y Historical EPS CAGR: 15.4%
The PEG Fair Value uses the Price/Earnings-to-Growth framework. A stock is fairly valued when its P/E ratio equals its earnings growth rate (PEG = 1.0). This model adds dividend yield to the growth rate per the original PEGY formula.
Growth rate priority: analyst consensus forward EPS CAGR (when ≥ 3 analysts cover the stock), falling back to historical EPS CAGR. Using EPS rather than net income avoids distortion from share buybacks. The growth rate is clamped between 8% and 25% — below 8% would undervalue stable earners, while above 25% would overvalue unsustainable spikes.