UPDATE: Goldman Sachs Downgrades W.W. Grainger to Sell, Lowers Price Target

In a report issued Tuesday, Goldman Sachs Downgraded W.W. Grainger

to Sell from Neutral and lowered the price target to $232 from $250. Goldman Sachs' Joe Ritchie noted, "Over the last 3 months, GWW has under-performed our coverage by about 1,100 basis points due to disappointing guidance issued in November and a weak 4th quarter reported in January." Ritchie also noted that Grainger will have to deal with limited flexibility due to capital expenditure investments and conservatism. Looking to the future, Ritchie may become more positive if: (1) pricing trends improve; (2) GM pulls through from initiative spending surprises; (3) mix towards small/medium sized customers improves; and (4) the overall growth environment turns more negative, supporting a higher relative multiple for Grainger. At last check, Grainger was trading up approximately 2 percent at $238.71