BMO Capital Views Sherwin-Williams as a Promising Short and Long Term Investment Opportunity

Sherwin-Williams (NYSE:SHW) saw its rating cut by Citi from Buy to Neutral, with the price target trimmed to $385 from $405, as analysts flagged ongoing challenges in the housing sector that could weigh on near-term performance. As a result, the company’s shares fell over 3% intra-day today.

Citi pointed to sustained pressure from elevated mortgage rates and delayed expectations for Federal Reserve rate cuts, both of which are dampening hopes for a meaningful housing recovery in the second half of 2025. While the firm still views Sherwin-Williams as a strong long-term player with solid market share potential, current conditions suggest limited upside in the short term.

Without clear near-term catalysts, Citi sees the stock’s risk/reward profile as less compelling and recommends investors consider other names better positioned for today’s macro environment. The firm expressed a preference for RPM International, citing its greater exposure to non-residential construction and infrastructure spending trends.

Sherwin-Williams (NYSE:SHW), a prominent player in the coatings industry, recently reported its earnings for January 30, 2025. The company achieved an EPS of $2.09, surpassing the estimated $2.06. However, its revenue of approximately $5.3 billion slightly missed the expected $5.31 billion. Sherwin-Williams operates through three main segments: Paint Stores Group, Consumer Brands Group, and Performance Coatings Group.

In the fourth quarter of 2024, Sherwin-Williams reported earnings of $1.90 per share, a significant increase of 36.7% from the previous year's $1.39. Excluding one-time items, the adjusted EPS was $2.09, exceeding the Zacks Consensus Estimate of $2.07. Despite this, the company's revenue of $5.3 billion reflected only a 0.9% year-over-year increase, falling short of the $5.31 billion estimate.

The Paint Stores Group drove the rise in consolidated net sales, but this was partially offset by decreased sales in the Consumer Brands and Performance Coatings Groups. Additionally, a 1.3% negative impact from foreign currency translation affected the overall revenue. Despite these challenges, Sherwin-Williams demonstrated strong profitability with a 15.5% improvement in adjusted EPS from the previous year.

Sherwin-Williams faces a volatile market, as highlighted by Market Watch, with sales falling short of market estimates and soft guidance for the first quarter and the entirety of 2025. This has contributed to a decline in its stock price. The company's financial metrics, such as a P/E ratio of 35.86 and a price-to-sales ratio of 4, reflect investor sentiment and valuation concerns.

The company's debt-to-equity ratio of 2.91 indicates a reliance on debt financing, while a current ratio of 0.83 suggests potential challenges in covering short-term liabilities. Despite these financial pressures, Sherwin-Williams remains a key player in the industry, navigating through market fluctuations and striving for growth.

Sherwin-Williams (NYSE:SHW), a prominent player in the coatings industry, recently reported its earnings for January 30, 2025. The company achieved an EPS of $2.09, surpassing the estimated $2.06. However, its revenue of approximately $5.3 billion slightly missed the expected $5.31 billion. Sherwin-Williams operates through three main segments: Paint Stores Group, Consumer Brands Group, and Performance Coatings Group.

In the fourth quarter of 2024, Sherwin-Williams reported earnings of $1.90 per share, a significant increase of 36.7% from the previous year's $1.39. Excluding one-time items, the adjusted EPS was $2.09, exceeding the Zacks Consensus Estimate of $2.07. Despite this, the company's revenue of $5.3 billion reflected only a 0.9% year-over-year increase, falling short of the $5.31 billion estimate.

The Paint Stores Group drove the rise in consolidated net sales, but this was partially offset by decreased sales in the Consumer Brands and Performance Coatings Groups. Additionally, a 1.3% negative impact from foreign currency translation affected the overall revenue. Despite these challenges, Sherwin-Williams demonstrated strong profitability with a 15.5% improvement in adjusted EPS from the previous year.

Sherwin-Williams faces a volatile market, as highlighted by Market Watch, with sales falling short of market estimates and soft guidance for the first quarter and the entirety of 2025. This has contributed to a decline in its stock price. The company's financial metrics, such as a P/E ratio of 35.86 and a price-to-sales ratio of 4, reflect investor sentiment and valuation concerns.

The company's debt-to-equity ratio of 2.91 indicates a reliance on debt financing, while a current ratio of 0.83 suggests potential challenges in covering short-term liabilities. Despite these financial pressures, Sherwin-Williams remains a key player in the industry, navigating through market fluctuations and striving for growth.

Jefferies analysts reduced their price target for Sherwin-Williams (NYSE:SHW) to $423 from $439, while maintaining a Buy rating. The adjustment reflects a cautious outlook on the timing of a demand recovery and slightly higher interest expense projections for 2025 and 2026.

The revised estimates stem from concerns that consensus forecasts may overly rely on a macroeconomic recovery in 2025, which the analysts believe could face downward revisions in the coming months. Despite these adjustments, Sherwin-Williams shares appear to have already priced in much of this uncertainty.

Jefferies’ model anticipates a potential rally exceeding 20% by the end of 2025, contingent on supportive Federal Reserve policies and the absence of adverse economic shocks. While near-term caution persists, Sherwin-Williams remains well-positioned to deliver long-term value for investors, backed by its robust fundamentals and resilience in the face of macroeconomic challenges, as per the analysts.

Jefferies analysts reduced their price target for Sherwin-Williams (NYSE:SHW) to $423 from $439, while maintaining a Buy rating. The adjustment reflects a cautious outlook on the timing of a demand recovery and slightly higher interest expense projections for 2025 and 2026.

The revised estimates stem from concerns that consensus forecasts may overly rely on a macroeconomic recovery in 2025, which the analysts believe could face downward revisions in the coming months. Despite these adjustments, Sherwin-Williams shares appear to have already priced in much of this uncertainty.

Jefferies’ model anticipates a potential rally exceeding 20% by the end of 2025, contingent on supportive Federal Reserve policies and the absence of adverse economic shocks. While near-term caution persists, Sherwin-Williams remains well-positioned to deliver long-term value for investors, backed by its robust fundamentals and resilience in the face of macroeconomic challenges, as per the analysts.

• Goldman Sachs reaffirms its "Buy" rating for Sherwin-Williams (NYSE:SHW), despite the stock's decline following its Q3 earnings report.
• The company's Q3 earnings fell short of expectations, with total sales of $6.16 billion and profits of $806.2 million.
• Sherwin-Williams' stock price experienced a decrease of 5.34%, trading between a low of $361.01 and a high of $389 on the day of the report.

On October 23, 2024, Goldman Sachs reiterated its "Buy" rating for Sherwin-Williams (NYSE:SHW), with the stock trading at $361.38. Sherwin-Williams is a leading paint and coatings manufacturer, known for its wide range of products catering to both professional and DIY markets. The company competes with other industry giants like PPG Industries and AkzoNobel.

Sherwin-Williams recently held its Q3 2024 earnings conference call, featuring key executives like CEO Heidi Petz and CFO Al Mistysyn. The call, attended by analysts from major financial institutions, provided insights into the company's performance and future outlook. Despite the "Buy" rating from Goldman Sachs, the stock experienced a decline following the earnings release.

The company's Q3 2024 earnings fell short of expectations, with total sales of $6.16 billion, missing the anticipated $6.22 billion. Profits rose by just over 5% to $806.2 million, but this was below the $873.54 million consensus estimate. CEO Heidi Petz cited "continued choppiness" and "softness" in demand, particularly in the DIY market, as reasons for the underperformance.

Sherwin-Williams reported earnings of $3.37 per share, which was below the Zacks Consensus Estimate of $3.56 per share. This represents a negative surprise of 5.34%. In contrast, the previous quarter saw a positive surprise, with earnings of $3.70 per share against an anticipated $3.51. Over the past four quarters, the company has exceeded consensus EPS estimates twice.

The stock, currently priced at $361.38, has seen a decrease of 5.34%, with a change of -$20.37. It has traded between a low of $361.01 and a high of $389 today. Over the past year, SHW has reached a high of $392.57 and a low of $232.06. The market capitalization stands at approximately $91.16 billion, with a trading volume of 4,282,861 shares.

• Goldman Sachs reaffirms its "Buy" rating for Sherwin-Williams (NYSE:SHW), despite the stock's decline following its Q3 earnings report.
• The company's Q3 earnings fell short of expectations, with total sales of $6.16 billion and profits of $806.2 million.
• Sherwin-Williams' stock price experienced a decrease of 5.34%, trading between a low of $361.01 and a high of $389 on the day of the report.

On October 23, 2024, Goldman Sachs reiterated its "Buy" rating for Sherwin-Williams (NYSE:SHW), with the stock trading at $361.38. Sherwin-Williams is a leading paint and coatings manufacturer, known for its wide range of products catering to both professional and DIY markets. The company competes with other industry giants like PPG Industries and AkzoNobel.

Sherwin-Williams recently held its Q3 2024 earnings conference call, featuring key executives like CEO Heidi Petz and CFO Al Mistysyn. The call, attended by analysts from major financial institutions, provided insights into the company's performance and future outlook. Despite the "Buy" rating from Goldman Sachs, the stock experienced a decline following the earnings release.

The company's Q3 2024 earnings fell short of expectations, with total sales of $6.16 billion, missing the anticipated $6.22 billion. Profits rose by just over 5% to $806.2 million, but this was below the $873.54 million consensus estimate. CEO Heidi Petz cited "continued choppiness" and "softness" in demand, particularly in the DIY market, as reasons for the underperformance.

Sherwin-Williams reported earnings of $3.37 per share, which was below the Zacks Consensus Estimate of $3.56 per share. This represents a negative surprise of 5.34%. In contrast, the previous quarter saw a positive surprise, with earnings of $3.70 per share against an anticipated $3.51. Over the past four quarters, the company has exceeded consensus EPS estimates twice.

The stock, currently priced at $361.38, has seen a decrease of 5.34%, with a change of -$20.37. It has traded between a low of $361.01 and a high of $389 today. Over the past year, SHW has reached a high of $392.57 and a low of $232.06. The market capitalization stands at approximately $91.16 billion, with a trading volume of 4,282,861 shares.