CDW's Strong Q2 Overshadowed by Gross Margin Pressure, Morgan Stanley Says

MT Newswires Live08-06 23:17

CDW (CDW) delivered a strong Q2 with beats in revenue, gross profit, and earnings per share, but weaker-than-expected gross margins continued to weigh on investor sentiment, Morgan Stanley said in a note Wednesday.

The investment firm said the company's Q1 margin miss was due to product mix, while the Q2 miss reflected a higher mix of Large Enterprise sales. Since gross margins have historically been closely tied to the company's valuation, this has weighed on the stock, according to the note.

The firm said the market is overreacting to the weaker gross margin. Based on its valuation model, Morgan Stanley said CDW is trading at about 11.5 times its 2027 EPS estimate of $12.20, compared with an implied fair value of around 15 times earnings.

The firm said it doesn't expect intra-quarter catalysts for the stock, but added that "a cleaner beat/raise next quarter should catalyze a bid for the stock and allow investors to regain confidence in a re-rating opportunity."

Morgan Stanley raised its price target on CDW to $171 from $170, and kept its overweight rating.

Shares of CDW were up 0.5% in Thursday trading.

Price: 140.82, Change: +0.72, Percent Change: +0.51

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

Comments

We need your insight to fill this gap

Leave a comment

{"i18n":{"language":"en_US"},"isChannel":false,"data":{"share":"https://ttm.financial/m/news/2657653129?lang=en_US&edition=fundamental","thumbnail":"","is_english":true,"pubTime":"2026-08-06 23:17","share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","id":"2657653129","market":"us","top_or_hot":-1,"title":"CDW's Strong Q2 Overshadowed by Gross Margin Pressure, Morgan Stanley Says","media":"MT Newswires Live","content":"<html><body><p> <a href=\"https://laohu8.com/S/BXE.SI\">CDW</a> (CDW) delivered a strong Q2 with beats in revenue, gross profit, and earnings per share, but weaker-than-expected gross margins continued to weigh on investor sentiment, Morgan Stanley said in a note Wednesday.</p><p>The investment firm said the company's Q1 margin miss was due to product mix, while the Q2 miss reflected a higher mix of Large Enterprise sales. Since gross margins have historically been closely tied to the company's valuation, this has weighed on the stock, according to the note.</p><p>The firm said the market is overreacting to the weaker gross margin. Based on its valuation model, Morgan Stanley said CDW is trading at about 11.5 times its 2027 EPS estimate of $12.20, compared with an implied fair value of around 15 times earnings.</p><p>The firm said it doesn't expect intra-quarter catalysts for the stock, but added that \"a cleaner beat/raise next quarter should catalyze a bid for the stock and allow investors to regain confidence in a re-rating opportunity.\"</p><p>Morgan Stanley raised its price target on CDW to $171 from $170, and kept its overweight rating.</p><p>Shares of CDW were up 0.5% in Thursday trading.</p><p>Price: 140.82, Change: +0.72, Percent Change: +0.51</p></body></html>","source":"mtnewswires_news","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>CDW's Strong Q2 Overshadowed by Gross Margin Pressure, Morgan Stanley Says</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nCDW's Strong Q2 Overshadowed by Gross Margin Pressure, Morgan Stanley Says\n</h2>\n\n<h4 class=\"meta\">\n\n\n<a class=\"head\" href=\"https://laohu8.com/wemedia/1092851196\">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://community-static.tradeup.com/news/3002d84abbd5ace3c99397c7f95b8d4e);background-size:cover;\"></div>\n\n<div class=\"h-content\">\n<p class=\"h-name\">MT Newswires Live </p>\n<p class=\"h-time\">2026-08-06 23:17</p>\n</div>\n\n</a>\n\n\n</h4>\n\n</header>\n<article>\n<html><body><p> <a href=\"https://laohu8.com/S/BXE.SI\">CDW</a> (CDW) delivered a strong Q2 with beats in revenue, gross profit, and earnings per share, but weaker-than-expected gross margins continued to weigh on investor sentiment, Morgan Stanley said in a note Wednesday.</p><p>The investment firm said the company's Q1 margin miss was due to product mix, while the Q2 miss reflected a higher mix of Large Enterprise sales. Since gross margins have historically been closely tied to the company's valuation, this has weighed on the stock, according to the note.</p><p>The firm said the market is overreacting to the weaker gross margin. Based on its valuation model, Morgan Stanley said CDW is trading at about 11.5 times its 2027 EPS estimate of $12.20, compared with an implied fair value of around 15 times earnings.</p><p>The firm said it doesn't expect intra-quarter catalysts for the stock, but added that \"a cleaner beat/raise next quarter should catalyze a bid for the stock and allow investors to regain confidence in a re-rating opportunity.\"</p><p>Morgan Stanley raised its price target on CDW to $171 from $170, and kept its overweight rating.</p><p>Shares of CDW were up 0.5% in Thursday trading.</p><p>Price: 140.82, Change: +0.72, Percent Change: +0.51</p></body></html>\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"BK4140","symbol_name":"技术产品经销商","start_time":0,"source_url":"https://www.mtnewswires.com/","article_id":"2657653129","we_media_id":"1092851196","thumbnails":[],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2657653129","pubTimestamp":1786029451,"columns":[],"sourceInfo":{"source_id":"mtnewswires_news","name":"MT Newswires"},"weMediaInfo":{"media_name":"MT Newswires Live","introduction":"The most recognized names in North America, Europe and Asia rely on MT Newswires to power their applications. Better news, better service, better price.","home_visible":1,"id":"1092851196","head_image":"https://community-static.tradeup.com/news/3002d84abbd5ace3c99397c7f95b8d4e"},"summary":"CDW  delivered a strong Q2 with beats in revenue, gross profit, and earnings per share, but weaker-than-expected gross margins continued to weigh on investor sentiment, Morgan Stanley said in a note Wednesday.The investment firm said the company's Q1 margin miss was due to product mix, while the Q2 miss reflected a higher mix of Large Enterprise sales. Since gross margins have historically been closely tied to the company's valuation, this has weighed on the stock, according to the note.The firm said the market is overreacting to the weaker gross margin. Based on its valuation model, Morgan Stanley said CDW is trading at about 11.5 times its 2027 EPS estimate of $12.20, compared with an implied fair value of around 15 times earnings.The firm said it doesn't expect intra-quarter catalysts for the stock, but added that \"a cleaner beat/raise next quarter should catalyze a bid for the stock and allow investors to regain confidence in a re-rating opportunity.\"Morgan Stanley raised its price","collect":0,"end_time":0,"defaultTopTitle":"","property":[],"viewcount":null,"language":"en","relate_stocks":{"BK4140":"技术产品经销商","BXE.SI":"CDW","BK6058":"半导体产品","LU2065732104.USD":"ALLSPRING (LUX) WF GLOBAL SMALL CAP EQUITY \"I\" (USD) ACC","LU0006061336.USD":"Blackrock US Small and MidCap Opportunities A2 USD","CDW":"CDW Corporation","BK4588":"碎股","BK4585":"ETF&股票定投概念","BK6515":"技术设备股"},"translate_title":"摩根士丹利表示，CDW 第二季度的强劲业绩被毛利率压力所掩盖","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"BXE.SI":0.9,"CDW":1.5},"content_text":"CDW (CDW) delivered a strong Q2 with beats in revenue, gross profit, and earnings per share, but weaker-than-expected gross margins continued to weigh on investor sentiment, Morgan Stanley said in a note Wednesday.The investment firm said the company's Q1 margin miss was due to product mix, while the Q2 miss reflected a higher mix of Large Enterprise sales. Since gross margins have historically been closely tied to the company's valuation, this has weighed on the stock, according to the note.The firm said the market is overreacting to the weaker gross margin. Based on its valuation model, Morgan Stanley said CDW is trading at about 11.5 times its 2027 EPS estimate of $12.20, compared with an implied fair value of around 15 times earnings.The firm said it doesn't expect intra-quarter catalysts for the stock, but added that \"a cleaner beat/raise next quarter should catalyze a bid for the stock and allow investors to regain confidence in a re-rating opportunity.\"Morgan Stanley raised its price target on CDW to $171 from $170, and kept its overweight rating.Shares of CDW were up 0.5% in Thursday trading.Price: 140.82, Change: +0.72, Percent Change: +0.51","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":true,"editions":null,"column":"","sentiment":"-1","news_tag":"dataReport","news_rank":0,"isVideo":false,"video":null,"symbols":[],"gpt_button":0,"need_auth":false,"need_login_tip":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"isLaohu8Offline":false,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.47.1","shortVersion":"4.47.1","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2657653129","isCrawlerRequest":true}