Sherwin-Williams: A Strong Player in the Paint Industry
Company Overview
The Sherwin-Williams Company (SHW), with a market cap of $95.4 billion, is a leading supplier of paints and coatings. The company operates over 5,000 stores, while its products can also be found at major retail outlets.
Stock Performance Compared to Market
Over the past year, Sherwin-Williams’ shares have significantly outperformed the broader market. The stock has surged 43.1%, whereas the S&P 500 Index ($SPX) has increased by 30.4%. However, in 2024, SHW’s stock appreciated by 21.5%, falling short of the SPX’s 23.1% gain for the year-to-date (YTD).
Comparison with Vanguard Materials Index
Looking at the Vanguard Materials Index Fund ETF Shares (VAW), Sherwin-Williams shows even stronger results. Over the past year, the ETF saw a rise of around 16.4%. Additionally, SHW’s YTD gains outpace the ETF’s returns of 7.5% during the same period.
Recent Developments Affecting Stock Price
On November 4, Sherwin-Williams’ shares climbed 4% after the announcement that it would be included in the Dow Jones Industrial Average, set to take effect on November 8, replacing Dow Inc. (DOW). However, the stock faced a setback on October 22 when Q3 earnings were released, resulting in a 5.3% decline. The adjusted EPS was $3.37, falling short of Wall Street’s estimate of $3.56, while revenue totaled $6.16 billion—below the anticipated $6.23 billion. The company expects full-year earnings to be between $11.10 and $11.40 per share.
Analyst Expectations for Fiscal Year
For the fiscal year ending in December, analysts project that Sherwin-Williams’ earnings per share (EPS) will grow by 9.4% to reach $11.32 on a diluted basis. Historically, the company has had mixed results regarding earnings surprises: it has exceeded consensus estimates in two of the last four quarters and missed in two others.
Analyst Ratings Overview
Among the 24 analysts covering SHW, there is a consensus rating of “Moderate Buy.” This includes 13 “Strong Buy” ratings, two “Moderate Buys,” eight “Holds,” and one “Moderate Sell.” Notably, the sentiment here has softened since two months ago when 14 analysts had rated the stock as a “Strong Buy.”
Future Price Targets
On November 7, Evercore Inc. (EVR) analyst Greg Melich reiterated a “Buy” rating for Sherwin-Williams with a price target of $420. The average price target stands at $397.18, indicating a 4.8% premium to the current price. The highest price target of $450 suggests a potential upside of 18.7%.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
