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Sherwin-Williams (SHW) Up 3.4% Since Last Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Sherwin-Williams (SHW - Free Report) . Shares have added about 3.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sherwin-Williams due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sherwin-Williams' Earnings & Sales Beat Estimates in Q3
Sherwin-Williams logged earnings (as reported) of $1.88 per share in third-quarter 2021, down 26.3% from $2.55 in the year-ago quarter.
Barring one-time items, adjusted earnings in the reported quarter were $2.09 per share. The figure topped the Zacks Consensus Estimate of $2.07.
Sherwin-Williams posted revenues of $5,146.7 million, up 0.5% year over year. The figure surpassed the Zacks Consensus Estimate of $5,105.8 million. While the company benefited from strong demand in its pro-architectural and industrial end markets, it faced headwinds from raw material supply chain challenges.
Segmental Review
The Americas Group segment registered net sales of $2,967 million in the third quarter, down 0.4% year over year. The downside was primarily caused by reduced sales volume of paint products as a result of raw material availability issues, partly offset by selling price increases in all the end markets.
Net sales in the Consumer Brands Group segment declined 22.8% year over year to $646.7 million. The downtick was mainly due to lower sales volume to all of its retail consumers and the Wattyl divestiture.
Net sales in the Performance Coatings Group increased 17.4% year over year to around $1,532.5 million in the reported quarter. The upside was mainly driven by higher sales volumes in all end markets served and higher selling prices.
Financials and Shareholder Returns
At the end of the third quarter, Sherwin-Williams had cash and cash equivalents of $313.3 million, down 49.5% year over year. Long-term debt declined 8% year over year to $7,604.9 million.
The company repurchased around 8.1 million shares of its common stock in the first nine months. It had remaining authorization to repurchase roughly 50.58 million shares through open market purchases at the end of the quarter.
Outlook
The company expects consolidated net sales to increase mid-to-high single digit percentage in the fourth quarter. For 2021, it is expected to increase high-single digits. The company also expects adjusted earnings per share for 2021 between $8.35 and $8.55.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -5.95% due to these changes.
VGM Scores
At this time, Sherwin-Williams has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Sherwin-Williams has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Sherwin-Williams (SHW) Up 3.4% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Sherwin-Williams (SHW - Free Report) . Shares have added about 3.4% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sherwin-Williams due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Sherwin-Williams' Earnings & Sales Beat Estimates in Q3
Sherwin-Williams logged earnings (as reported) of $1.88 per share in third-quarter 2021, down 26.3% from $2.55 in the year-ago quarter.
Barring one-time items, adjusted earnings in the reported quarter were $2.09 per share. The figure topped the Zacks Consensus Estimate of $2.07.
Sherwin-Williams posted revenues of $5,146.7 million, up 0.5% year over year. The figure surpassed the Zacks Consensus Estimate of $5,105.8 million. While the company benefited from strong demand in its pro-architectural and industrial end markets, it faced headwinds from raw material supply chain challenges.
Segmental Review
The Americas Group segment registered net sales of $2,967 million in the third quarter, down 0.4% year over year. The downside was primarily caused by reduced sales volume of paint products as a result of raw material availability issues, partly offset by selling price increases in all the end markets.
Net sales in the Consumer Brands Group segment declined 22.8% year over year to $646.7 million. The downtick was mainly due to lower sales volume to all of its retail consumers and the Wattyl divestiture.
Net sales in the Performance Coatings Group increased 17.4% year over year to around $1,532.5 million in the reported quarter. The upside was mainly driven by higher sales volumes in all end markets served and higher selling prices.
Financials and Shareholder Returns
At the end of the third quarter, Sherwin-Williams had cash and cash equivalents of $313.3 million, down 49.5% year over year. Long-term debt declined 8% year over year to $7,604.9 million.
The company repurchased around 8.1 million shares of its common stock in the first nine months. It had remaining authorization to repurchase roughly 50.58 million shares through open market purchases at the end of the quarter.
Outlook
The company expects consolidated net sales to increase mid-to-high single digit percentage in the fourth quarter. For 2021, it is expected to increase high-single digits. The company also expects adjusted earnings per share for 2021 between $8.35 and $8.55.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month. The consensus estimate has shifted -5.95% due to these changes.
VGM Scores
At this time, Sherwin-Williams has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Sherwin-Williams has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.