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Sherwin-Williams (SHW) Rallies 16% in 3 Months: Here's Why
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The Sherwin-Williams Company’s (SHW - Free Report) shares have appreciated 15.7% in the past three months. The company also outperformed the industry’s rise of 13.8% and topped the S&P 500’s 5.7% rise over the same period.
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Let’s take a look at the factors driving the stock’s price appreciation.
What’s Driving Sherwin-Williams?
Sherwin-Williams delivered stronger-than-expected earnings in second-quarter 2024 and raised its full-year earnings guidance. SHW posted adjusted earnings of $3.70 per share, surpassing the Zacks Consensus Estimate of $3.51. Revenues reached $6,271.5 million, up 0.5% year over year, but falling short of the Zacks Consensus Estimate of $6,350.1 million. Revenue growth was driven by increased sales in the Paint Stores and Performance Coatings segments, partially offset by lower volumes in the Consumer Brands segment. The downtick was impacted by the divestiture of its China architectural business in 2023.
The Paint Stores Group achieved sales growth of approximately 3.5%, supported by low-single-digit volume gains and higher selling prices, with growth across all end markets except property maintenance. The Performance Coatings Group also registered modest sales growth, aided by an acquisition, although currency headwinds and mixed volume performance across regions were a challenge. The Consumer Brands Group experienced a sales decline, mainly due to weaker DIY demand in North America, a divestiture and unfavorable currency effects.
Looking ahead, Sherwin-Williams expects consolidated net sales to grow by a low-single-digit percentage year over year in the third quarter, with similar growth anticipated for the full year. The company projects 2024 earnings per share (EPS) to be between $10.30 and $10.60, with adjusted EPS in the range of $11.10-$11.40.
Sherwin-Williams delivered an average earnings surprise of 4.5% over the trailing four quarters. The Zacks Consensus Estimate for its 2024 EPS is pegged at $11.44, indicating an increase of 10.5% from the prior year’s tally.
The Zacks Consensus Estimate for Newmont’s current-year earnings is pegged at $2.82, indicating a rise of 75% from the year-ago levels. The consensus for NEM’s earnings has increased 16% in the past 60 days.The stock has gained nearly 33.4% in the past year.
The Zacks Consensus Estimate for ESI’s current-year earnings is pegged at $1.42, indicating a rise of 10% from the year-ago levels. ESI beat the consensus estimate in three of the last four quarters, with the average earnings surprise being 3.8%. The stock has rallied nearly 34.3% in the past year.
The Zacks Consensus Estimate for GOLD’s current year earnings is pegged at $1.21, indicating a year-over-year rise of 44%. GOLD’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average earnings surprise being 21.2%. The company’s shares have increased 29% in the past year.
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Sherwin-Williams (SHW) Rallies 16% in 3 Months: Here's Why
The Sherwin-Williams Company’s (SHW - Free Report) shares have appreciated 15.7% in the past three months. The company also outperformed the industry’s rise of 13.8% and topped the S&P 500’s 5.7% rise over the same period.
Image Source: Zacks Investment Research
Let’s take a look at the factors driving the stock’s price appreciation.
What’s Driving Sherwin-Williams?
Sherwin-Williams delivered stronger-than-expected earnings in second-quarter 2024 and raised its full-year earnings guidance. SHW posted adjusted earnings of $3.70 per share, surpassing the Zacks Consensus Estimate of $3.51. Revenues reached $6,271.5 million, up 0.5% year over year, but falling short of the Zacks Consensus Estimate of $6,350.1 million. Revenue growth was driven by increased sales in the Paint Stores and Performance Coatings segments, partially offset by lower volumes in the Consumer Brands segment. The downtick was impacted by the divestiture of its China architectural business in 2023.
The Paint Stores Group achieved sales growth of approximately 3.5%, supported by low-single-digit volume gains and higher selling prices, with growth across all end markets except property maintenance. The Performance Coatings Group also registered modest sales growth, aided by an acquisition, although currency headwinds and mixed volume performance across regions were a challenge. The Consumer Brands Group experienced a sales decline, mainly due to weaker DIY demand in North America, a divestiture and unfavorable currency effects.
Looking ahead, Sherwin-Williams expects consolidated net sales to grow by a low-single-digit percentage year over year in the third quarter, with similar growth anticipated for the full year. The company projects 2024 earnings per share (EPS) to be between $10.30 and $10.60, with adjusted EPS in the range of $11.10-$11.40.
Sherwin-Williams delivered an average earnings surprise of 4.5% over the trailing four quarters. The Zacks Consensus Estimate for its 2024 EPS is pegged at $11.44, indicating an increase of 10.5% from the prior year’s tally.
The Sherwin-Williams Company Price and Consensus
The Sherwin-Williams Company price-consensus-chart | The Sherwin-Williams Company Quote
Zacks Rank & Key Picks
SHW currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Newmont Corporation (NEM - Free Report) , Element Solutions Inc (ESI - Free Report) and Barrick Gold Corporation (GOLD - Free Report) . Newmont and ElementSolutionssport a Zacks Rank #1 (Strong Buy), while Barrick Gold carries a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Newmont’s current-year earnings is pegged at $2.82, indicating a rise of 75% from the year-ago levels. The consensus for NEM’s earnings has increased 16% in the past 60 days.The stock has gained nearly 33.4% in the past year.
The Zacks Consensus Estimate for ESI’s current-year earnings is pegged at $1.42, indicating a rise of 10% from the year-ago levels. ESI beat the consensus estimate in three of the last four quarters, with the average earnings surprise being 3.8%. The stock has rallied nearly 34.3% in the past year.
The Zacks Consensus Estimate for GOLD’s current year earnings is pegged at $1.21, indicating a year-over-year rise of 44%. GOLD’s earnings beat the Zacks Consensus Estimate in all of the last four quarters, the average earnings surprise being 21.2%. The company’s shares have increased 29% in the past year.