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Sherwin-Williams Sees Higher Q1 Sales Amid Coronavirus Scare

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The Sherwin-Williams Company (SHW - Free Report) reiterated its financial outlook for the first quarter of 2020.

For the first quarter, the company continues to project a 2-5% rise in net sales from the year-ago quarter. The company anticipates that its Americas Group unit will be at the high end of the range.

While Sherwin-Williams has been facing headwinds from the coronavirus pandemic (COVID-19), particularly outside the United States; it reaffirmed the first-quarter guidance amid the crisis.

To date, Sherwin-Williams has faced limited disruption to its supply chain and plant operations despite a dramatic rise in COVID-19 cases throughout Europe and North America. During this time, the majority of paint stores of Sherwin-Williams in North American continue to operate, and offer consumers numerous options for purchasing and receiving items.

The company is working diligently and proactively throughout its businesses to ensure that it takes every appropriate step to protect its customers and employees as well as maintain the continuity of business.

Per management, the company’s production activities in Asia are currently returning to pre-crisis levels, with sites working under the guidance of local and state governments.

While short-term market conditions are likely to remain volatile, the company envisions that its underlying long-term demand fundamentals will remain intact. It also remained focused on offering value-added solutions to meet customers’ needs.

Shares of Sherwin-Williams have gained 2.6% in the past year against the industry’s 26.9% decline.



On the fourth-quarter 2019 earnings call, the company stated that North American architectural demand is strong and industrial demand remains variable in terms of geography and end markets.

For 2020, it expects a 2-4% increase in net sales from the 2019 level. The company also expects earnings per share of $19.91-$20.71 for 2020, which indicates a rise from $16.49 reported in 2019.

The Sherwin-Williams Company Price and Consensus


Zacks Rank & Stocks to Consider

The company currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the basic materials space are Franco-Nevada Corporation (FNV - Free Report) , Barrick Gold Corporation (GOLD - Free Report) and NovaGold Resources Inc. (NG - Free Report) .

Franco-Nevada has a projected earnings growth rate of 24.2% for 2020. The company’s shares have rallied 37.7% in a year. It currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Barrick Gold currently has a Zacks Rank #2 (Buy) and a projected earnings growth rate of 43.1% for 2020. The company’s shares have rallied 21.1% in a year.

NovaGold has a projected earnings growth rate of 11.1% for 2020. It currently carries a Zacks Rank #2. The company’s shares have surged 74.2% in a year.

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