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

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In the latest trading session, Sherwin-Williams (SHW - Free Report) closed at $232.10, marking a -1.23% move from the previous day. This move lagged the S&P 500's daily loss of 0.78%. Elsewhere, the Dow lost 0.88%, while the tech-heavy Nasdaq lost 0.25%.

Heading into today, shares of the paint and coatings maker had lost 3.53% over the past month, outpacing the Construction sector's loss of 4.21% and lagging the S&P 500's loss of 3.4% in that time.

Wall Street will be looking for positivity from Sherwin-Williams as it approaches its next earnings report date. The company is expected to report EPS of $2.66, up 27.27% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $5.82 billion, up 12.99% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.65 per share and revenue of $21.98 billion, which would represent changes of +6.13% and +10.19%, respectively, from the prior 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. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 has moved 0.1% higher. Sherwin-Williams is currently sporting a Zacks Rank of #5 (Strong Sell).

Valuation is also important, so investors should note that Sherwin-Williams has a Forward P/E ratio of 27.16 right now. Its industry sports an average Forward P/E of 24.53, so we one might conclude that Sherwin-Williams is trading at a premium comparatively.

It is also worth noting that SHW currently has a PEG ratio of 2.26. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SHW's industry had an average PEG ratio of 3.37 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 244, putting it in the bottom 4% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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