UPDATE: Citigroup Downgrades WESCO International to Neutral, Reiterates $70 PT

In a report published Friday, Citigroup downgraded its rating on WESCO International

from Buy to Neutral, but reiterated its $70.00 price target. Citigroup noted, “WESCO is the leader in highly fragmented North American electrical products distribution with an estimated 5%-6% share. Although the company faces utility and nonresi market headwinds in the near term, we believe WESCO is gaining ample share in these depressed end markets. The electrical distribution market is estimated to be $75 billion and growing at a surprisingly solid 5% CAGR. WESCO passed Graybar Electric and lapped the combined Rexel/GE Supply business for the No. 1 position. We are positive on WESCO's business model, ‘One WESCO' growth strategy, and most of all, its scrappy, no-frills lean focus to running its distribution business. Its end-market mix is dominated by approximately 35% exposure to construction and 43% to industrial end markets. Given this mix, WESCO is one of the more cyclical companies in the Multi-Industry & Electrical Equipment (MI-EE) sector and the most leveraged.” WESCO International closed on Thursday at $65.11.