Cleveland, Ohio-based The Sherwin-Williams Company (SHW) specializes in developing and distributing paints, coatings, and related products for industrial, commercial, and retail clients. With a market capitalization of $83.5 billion, Sherwin-Williams operates through three key segments: the Paint Stores Group (PSG), Consumer Brands Group (CBG), and Performance Coatings Group (PCG).

Upcoming Earnings Announcement

The company is scheduled to announce its first-quarter results before market opening on Tuesday, April 29. Analysts predict that SHW will report adjusted earnings of $2.23 per share, reflecting a 2.8% increase compared to $2.17 per share from the same quarter last year. Notably, while the company has fallen short of analysts’ earnings expectations twice in the last four quarters, it managed to exceed those estimates on two occasions as well.

Fiscal Outlook for 2025 and Beyond

For the full fiscal year 2025, SHW’s adjusted earnings per share (EPS) is projected to rise from $11.33 in fiscal 2024 to $12, indicating a growth rate of 5.9%. In addition, earnings are anticipated to increase by 11.4% year-over-year to $13.37 in fiscal 2026.

Market Performance Insights

Over the past year, Sherwin-Williams’ stock price has seen a slight increase of 67 basis points, significantly outperforming the Materials Select Sector SPDR Fund’s (XLB) decline of 15.3% and the S&P 500 Index’s ($SPX) drop of 1.4% during the same period.

Recent Financial Results and Industry Challenges

Following its Q4 results announcement on January 30, SHW’s stock recorded a 1.4% uptick. While revenues in both the CBG and PCG segments saw declines, the PSG segment achieved a 3.4% year-over-year growth in net sales, surpassing $3 billion. The company’s overall revenue grew modestly by 86 basis points to $5.3 billion, which fell short of market expectations. On a more positive note, a significant margin expansion across segments resulted in a 15.5% increase in adjusted EPS to $2.09, exceeding consensus estimates by about 1%.

However, Sherwin-Williams notices that industry demand has constrained its revenue performance throughout 2024. Moving into fiscal 2025, the company anticipates above-market sales growth, yet it expects industry demand to remain soft, potentially continuing into 2026. Consequently, the company projects a low single-digit growth in FY 2025 net sales. On the positive side, Sherwin-Williams aims to enhance efficiency and implement cost-cutting measures, which could support modest margin expansion.

Analyst Sentiment and Price Projections

The consensus opinion regarding SHW stock leans moderately bullish, currently earning an overall “Moderate Buy” rating. Out of the 25 analysts covering the stock, 14 favor a “Strong Buy,” two recommend “Moderate Buy,” eight suggest “Hold,” and one proposes a “Moderate Sell” rating. The average price target is set at $393.50, indicating an 18.5% potential upside based on current price levels.

On the date of publication, Aditya Sarawgi did not hold (either directly or indirectly) any positions in the securities mentioned. All information and data presented in this article are for informational purposes only. For further details, please consult the Barchart Disclosure Policy here.

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