Paint maker Valspar Corporation (VAL - Free Report) is raising packaging prices in the Americas and Europe. This will help to offset a significant rise in raw material costs. Details of the price increases will be communicated to customers directly. The hike is effective Apr 1 or as contracts permit.
The company has witnessed a number of planned and unplanned outages in upstream supply markets, some of which have resulted in force majeure announcements. Also, increased crude oil prices, production issues and force majeure in some feedstock markets as well as continued push for environmental and safety regulations have led to higher feedstock prices for major commodity chemicals. This in turn has increased raw material prices.
Valspar’s shares rose 4.2% in the past three months, underperforming the Zacks categorized Paints and Allied Products industry’s gain of 7.4%.
Valspar continues to progress by winning new businesses, diversified product portfolio and expansion actions. Moreover, the company is set to be acquired by Sherwin-Williams (SHW - Free Report) in a deal worth roughly $11.3 billion. The planned merger is expected to create around $280 million in annual synergies within two years of the closure of the deal. Also, Valspar is taking measures to lower its cost structure and increase operational efficiency.
However, the company recorded lower profits in first-quarter fiscal 2017. Adjusted earnings for the quarter missed the Zacks Consensus Estimate.
Valspar is exposed to currency headwinds, stemming from a stronger U.S. dollar. Foreign exchange translation had an unfavorable impact on its overall sales in first-quarter fiscal 2017 and affected sales across its coatings and paints businesses.
Valspar also continues to witness irregular demand trends across its end markets and weakness for some of its products in overseas markets. Coatings demand for general industrial products remains somewhat soft. The company is also seeing weak sales for its consumer paints product lines in China and Australia and its automotive refinish product line globally as witnessed in the most recent quarter.
Valspar Corporation (The) Price and Consensus
Valspar currently carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Better-ranked companies in the construction space include Louisiana-Pacific Corporation (LPX - Free Report) and Boise Cascade, L.L.C. (BCC - Free Report) both sporting Zacks Rank#1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Louisiana-Pacific Corp has an expected long-term growth of 5%.
Boise Cascade has an expected long-term growth of 16.2%.
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Paint maker Valspar Corporation (VAL - Free Report) is raising packaging prices in the Americas and Europe. This will help to offset a significant rise in raw material costs. Details of the price increases will be communicated to customers directly. The hike is effective Apr 1 or as contracts permit.
The company has witnessed a number of planned and unplanned outages in upstream supply markets, some of which have resulted in force majeure announcements. Also, increased crude oil prices, production issues and force majeure in some feedstock markets as well as continued push for environmental and safety regulations have led to higher feedstock prices for major commodity chemicals. This in turn has increased raw material prices.
Valspar’s shares rose 4.2% in the past three months, underperforming the Zacks categorized Paints and Allied Products industry’s gain of 7.4%.
Valspar continues to progress by winning new businesses, diversified product portfolio and expansion actions. Moreover, the company is set to be acquired by Sherwin-Williams (SHW - Free Report) in a deal worth roughly $11.3 billion. The planned merger is expected to create around $280 million in annual synergies within two years of the closure of the deal. Also, Valspar is taking measures to lower its cost structure and increase operational efficiency.
However, the company recorded lower profits in first-quarter fiscal 2017. Adjusted earnings for the quarter missed the Zacks Consensus Estimate.
Valspar is exposed to currency headwinds, stemming from a stronger U.S. dollar. Foreign exchange translation had an unfavorable impact on its overall sales in first-quarter fiscal 2017 and affected sales across its coatings and paints businesses.
Valspar also continues to witness irregular demand trends across its end markets and weakness for some of its products in overseas markets. Coatings demand for general industrial products remains somewhat soft. The company is also seeing weak sales for its consumer paints product lines in China and Australia and its automotive refinish product line globally as witnessed in the most recent quarter.
Valspar Corporation (The) Price and Consensus
Valspar currently carries a Zacks Rank #5 (Strong Sell).
Stocks to Consider
Better-ranked companies in the construction space include Louisiana-Pacific Corporation (LPX - Free Report) and Boise Cascade, L.L.C. (BCC - Free Report) both sporting Zacks Rank#1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Louisiana-Pacific Corp has an expected long-term growth of 5%.
Boise Cascade has an expected long-term growth of 16.2%.
Looking for Ideas with Even Greater Upside?
Today's investment ideas are short-term, directly based on our proven 1 to 3 month indicator. In addition, I invite you to consider our long-term opportunities. These rare trades look to start fast with strong Zacks Ranks, but carry through with double and triple-digit profit potential. Starting now, you can look inside our home run, value, and stocks under $10 portfolios, plus more. Click here for a peek at this private information >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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