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Sherwin-Williams (SHW) Stock Up 15% in 3 Months: Here's Why
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The Sherwin-Williams Company’s (SHW - Free Report) shares have gained 14.6% over the past three months. The stock has outperformed its industry’s rise of 14.1% over the same time frame. The paints and coatings giant has also topped the S&P 500’s roughly 9% rise over the same period.
Image Source: Zacks Investment Research
Let’s take a look at the factors behind the stock’s price appreciation.
Sherwin-Williams, a Zacks Rank #1 (Strong Buy) company, is committed to boosting its retail business and is benefiting from robust domestic demand. The Paint Stores Group division is seeing increased architectural sales volumes. A strong indication that the company has invested in capturing a greater percentage of its end markets is the rising number of retail locations. In 2022, it added 72 net new stores, and an additional 80 and 100 more are expected to open in the United States and Canada the following year. In the first quarter of 2023, four net new stores were added.
SHW's cost-cutting initiatives, working capital reductions, supply chain optimization and productivity enhancements are resulting in margin increases. It continues undertaking pricing actions to offset cost increases, particularly in raw materials.
The company is also concentrating on cost-cutting through restructuring, which should pay off in 2023. It expects to save between $50 million and $70 million each year, 75% of which is expected to be realized by the end of 2023.
Sherwin-Williams has also reinforced its position as a global leader in paints and coatings by acquiring Valspar and leveraging its highly complementary offerings, strong brands and breakthrough technology. The acquisition broadened SHW's brand portfolio and client ties in North America while strengthening its worldwide finishing business. In addition to broadening the company's worldwide platform in Asia-Pacific, Europe, the Middle East and Africa, the acquisition offered additional capabilities in the packaging and coil markets.
Other Stocks to Consider
Other top-ranked stocks in the Constructions space are Arcosa Inc. (ACA - Free Report) , Boise Cascade Company (BCC - Free Report) and Beazer Homes USA (BZH - Free Report)
Arcosa currently sports a Zacks Rank #1. ACA’s earnings surpassed the Zacks Consensus Estimate in all the last four quarters. It has delivered a trailing four-quarter earnings surprise of 59.9%, on average. The stock has rallied 61.2% over the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
Boise Cascade currently flaunts a Zacks Rank #1. The Zacks Consensus Estimate for BCC’s current-year earnings has been stable in the past 60 days. It has a trailing four-quarter earnings surprise of 19%, on average. The stock has gained 58.1% over the past year.
Beazer Homes USA, currently carrying a Zacks Rank #1, has gained 46.2% over the past year. The company’s earnings beat the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 104.8%, on average.
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Sherwin-Williams (SHW) Stock Up 15% in 3 Months: Here's Why
The Sherwin-Williams Company’s (SHW - Free Report) shares have gained 14.6% over the past three months. The stock has outperformed its industry’s rise of 14.1% over the same time frame. The paints and coatings giant has also topped the S&P 500’s roughly 9% rise over the same period.
Image Source: Zacks Investment Research
Let’s take a look at the factors behind the stock’s price appreciation.
Sherwin-Williams, a Zacks Rank #1 (Strong Buy) company, is committed to boosting its retail business and is benefiting from robust domestic demand. The Paint Stores Group division is seeing increased architectural sales volumes. A strong indication that the company has invested in capturing a greater percentage of its end markets is the rising number of retail locations. In 2022, it added 72 net new stores, and an additional 80 and 100 more are expected to open in the United States and Canada the following year. In the first quarter of 2023, four net new stores were added.
SHW's cost-cutting initiatives, working capital reductions, supply chain optimization and productivity enhancements are resulting in margin increases. It continues undertaking pricing actions to offset cost increases, particularly in raw materials.
The company is also concentrating on cost-cutting through restructuring, which should pay off in 2023. It expects to save between $50 million and $70 million each year, 75% of which is expected to be realized by the end of 2023.
Sherwin-Williams has also reinforced its position as a global leader in paints and coatings by acquiring Valspar and leveraging its highly complementary offerings, strong brands and breakthrough technology. The acquisition broadened SHW's brand portfolio and client ties in North America while strengthening its worldwide finishing business. In addition to broadening the company's worldwide platform in Asia-Pacific, Europe, the Middle East and Africa, the acquisition offered additional capabilities in the packaging and coil markets.
Other Stocks to Consider
Other top-ranked stocks in the Constructions space are Arcosa Inc. (ACA - Free Report) , Boise Cascade Company (BCC - Free Report) and Beazer Homes USA (BZH - Free Report)
Arcosa currently sports a Zacks Rank #1. ACA’s earnings surpassed the Zacks Consensus Estimate in all the last four quarters. It has delivered a trailing four-quarter earnings surprise of 59.9%, on average. The stock has rallied 61.2% over the past year. You can see the complete list of today’s Zacks Rank #1 stocks here.
Boise Cascade currently flaunts a Zacks Rank #1. The Zacks Consensus Estimate for BCC’s current-year earnings has been stable in the past 60 days. It has a trailing four-quarter earnings surprise of 19%, on average. The stock has gained 58.1% over the past year.
Beazer Homes USA, currently carrying a Zacks Rank #1, has gained 46.2% over the past year. The company’s earnings beat the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 104.8%, on average.