Back to top

Image: Bigstock

Sherwin-Williams (SHW) Stock Sinks As Market Gains: What You Should Know

Read MoreHide Full Article

Sherwin-Williams (SHW - Free Report) closed the most recent trading day at $220.15, moving -1.18% from the previous trading session. This change lagged the S&P 500's 2.45% gain on the day. Meanwhile, the Dow gained 2.15%, and the Nasdaq, a tech-heavy index, added 0.17%.

Coming into today, shares of the paint and coatings maker had lost 14.07% in the past month. In that same time, the Construction sector lost 11.24%, while the S&P 500 lost 5.71%.

Sherwin-Williams will be looking to display strength as it nears its next earnings release, which is expected to be July 27, 2022. The company is expected to report EPS of $2.78, up 4.91% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $6 billion, up 11.46% from the prior-year quarter.

SHW's full-year Zacks Consensus Estimates are calling for earnings of $9.48 per share and revenue of $21.88 billion. These results would represent year-over-year changes of +16.32% and +9.68%, respectively.

It is also important to note the recent changes to analyst estimates for Sherwin-Williams. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. 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.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Sherwin-Williams is currently sporting a Zacks Rank of #3 (Hold).

Looking at its valuation, Sherwin-Williams is holding a Forward P/E ratio of 23.51. For comparison, its industry has an average Forward P/E of 20.57, which means Sherwin-Williams is trading at a premium to the group.

It is also worth noting that SHW currently has a PEG ratio of 1.78. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. SHW's industry had an average PEG ratio of 2.6 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 includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow SHW in the coming trading sessions, be sure to utilize

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