Cleveland, Ohio-based The Sherwin-Williams Company (SHW) develops, manufactures, distributes, and sells paint, coatings, and related products. Valued at a market cap of $89.7 billion, the company offers a diverse portfolio of products under various brands, including Sherwin-Williams, Valspar, Dutch Boy, Krylon, Minwax, and Thompson's WaterSeal, serving professional, industrial, commercial, and retail customers.
Companies worth $10 billion or more are typically classified as “large-cap stocks,” and SHW fits the label perfectly, with its market cap exceeding this threshold, underscoring its size, influence, and dominance within the specialty chemicals industry. The company’s key strengths lie in its market leadership, strong brand portfolio, and vertically integrated business model. As one of the world’s largest paint and coatings companies, it benefits from a vast network of over 5,000 company-operated stores, giving it unmatched distribution control and direct customer engagement.
This paint and coatings giant has slipped 10.7% from its 52-week high of $400.42, reached on Nov. 27, 2024. Shares of SHW have increased marginally over the past three months, lagging behind the Nasdaq Composite’s ($NASX) 5.7% rise during the same time frame.
Nonetheless, in the longer term, SHW has rallied 18.5% over the past 52 weeks, outperforming NASX’s 15.3% uptick over the same time frame. Moreover, on a YTD basis, shares of SHW are up 5.3%, compared to NASX’s slight return.
To confirm its bearish trend, SHW has been trading below its 200-day moving average since mid-March, with slight fluctuations. However, it has remained above its 50-day moving average since late April.
On Apr. 29, shares of SHW soared 4.8% after its mixed Q1 earnings release. The company’s net sales declined 1.1% year-over-year to $5.3 billion and fell short of the consensus estimates. Weaker sales in the performance coatings and consumer brands groups, impacted by unfavorable foreign currency translation and soft DIY demand in North America, affected its overall top line. However, on the earnings front, due to gross margin expansion and good cost control, its adjusted EPS of $2.25 improved by 3.7% from the year-ago quarter and outpaced the analyst estimates by 3.2%.
Looking ahead to fiscal 2025, Sherwin-Williams expects net sales to grow in the low-single-digit range, and projects adjusted EPS to be between $11.65 and $12.05. This outlook reflects the company’s expectation of continued demand softness across several end markets through the second half of the year.
SHW has outpaced its rival, PPG Industries, Inc. (PPG), which declined 15.4% over the past 52 weeks and 6.8% on a YTD basis.
While Sherwin-Williams has underperformed the Nasdaq recently, analysts remain moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 25 analysts covering it, and the mean price target of $389.77 suggests an 8.9% premium to its current price levels.
On the date of publication, Neharika Jain 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.
