Back to top

Image: Bigstock

Sherwin-Williams (SHW) Dips More Than Broader Markets: What You Should Know

Read MoreHide Full Article

Sherwin-Williams (SHW - Free Report) closed at $265.26 in the latest trading session, marking a -1.04% move from the prior day. This change lagged the S&P 500's 0.75% loss on the day.

Coming into today, shares of the paint and coatings maker had lost 0.49% in the past month. In that same time, the Construction sector gained 1.16%, while the S&P 500 gained 0.32%.

Sherwin-Williams will be looking to display strength as it nears its next earnings release. On that day, Sherwin-Williams is projected to report earnings of $2.78 per share, which would represent year-over-year growth of 4.91%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $6 billion, up 11.46% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.48 per share and revenue of $21.88 billion. These totals would mark changes of +16.32% and +9.68%, respectively, from last year.

Investors should also note any recent changes to analyst estimates for Sherwin-Williams. These revisions help to show the ever-changing nature of near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Sherwin-Williams is currently sporting a Zacks Rank of #3 (Hold).

Investors should also note Sherwin-Williams's current valuation metrics, including its Forward P/E ratio of 28.28. Its industry sports an average Forward P/E of 26.08, so we one might conclude that Sherwin-Williams is trading at a premium comparatively.

Investors should also note that SHW has a PEG ratio of 2.14 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Paints and Related Products industry currently had an average PEG ratio of 3.39 as of yesterday's close.

The Paints and Related Products industry is part of the Construction sector. This group has a Zacks Industry Rank of 106, putting it in the top 42% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


The SherwinWilliams Company (SHW) - free report >>

Published in