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

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In the latest trading session, Sherwin-Williams (SHW - Free Report) closed at $224.89, marking a +1.67% move from the previous day. This change outpaced the S&P 500's 0.95% gain on the day. At the same time, the Dow added 0.64%, and the tech-heavy Nasdaq gained 0.15%.

Coming into today, shares of the paint and coatings maker had lost 16.57% in the past month. In that same time, the Construction sector lost 10.42%, while the S&P 500 lost 3.49%.

Wall Street will be looking for positivity from Sherwin-Williams as it approaches its next earnings report date. This 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.

For the full year, our Zacks Consensus Estimates are projecting earnings of $9.48 per share and revenue of $21.88 billion, which would represent changes of +16.32% and +9.68%, respectively, from the prior year.

Any recent changes to analyst estimates for Sherwin-Williams should also be noted by investors. 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.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

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. Over the past month, the Zacks Consensus EPS estimate remained stagnant. Sherwin-Williams is currently sporting a Zacks Rank of #3 (Hold).

Digging into valuation, Sherwin-Williams currently has a Forward P/E ratio of 23.34. This represents a premium compared to its industry's average Forward P/E of 20.67.

Also, we should mention that SHW has a PEG ratio of 1.77. 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. Paints and Related Products stocks are, on average, holding a PEG ratio of 2.63 based on yesterday's closing prices.

The Paints and Related Products industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 110, which puts it in the top 44% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our 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.


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