On Tuesday, Sherwin-Williams (NYSE:SHW) had its stock price target increased by a Jefferies analyst to $392.00, up from the previous target of $370.00, while the Buy rating on the stock was reaffirmed. The adjustment follows the company's second-quarter earnings per share (EPS) of $3.70, which exceeded the consensus by $0.21 and the analyst's estimate by $0.18.
The company's EPS outlook for 2024 was slightly adjusted upwards by 1% to a range of $11.10-$11.40, closely aligning with the consensus of $11.37. The analyst predicts that Sherwin-Williams' market share gains, particularly in the residential sector, are likely to support sales growth through the end of the year, despite a continued slump in the do-it-yourself (DIY) segment.
For the third quarter, the company anticipates a sales increase of 1-3%. While the refinish volumes remain steady, the demand in the industrial sector is reported to be mostly soft. The analyst suggests that the company's valuation could expand further as it continues to demonstrate proof of gaining market share.
In other recent news, Sherwin-Williams has seen several adjustments to its stock price targets and ratings by various analyst firms. Mizuho increased the company's price target to $365, maintaining an 'Outperform' rating, anticipating a boost from potential increased housing activity.
BMO Capital lowered its price target to $360, also retaining an 'Outperform' rating, with a cautious stance on volume trends. Investment firm Jefferies maintained its 'Buy' rating on Sherwin-Williams shares with a steady price target of $370, citing potential share gains and price increases despite a slowdown in housing construction.
RBC Capital reduced its price target for Sherwin-Williams to $370 but retained an 'Outperform' rating, highlighting the company's ongoing investments and effective pricing strategies as potential growth drivers. KeyBanc upgraded Sherwin-Williams shares from 'Sector Weight' to 'Overweight', setting a new price target of $400, anticipating continued market share gains in the architectural paint sector and benefits from the U.S. housing shortage.
These recent developments indicate that while Sherwin-Williams faces challenges in the current market environment, analysts believe in the company's resilience and potential for growth, particularly in relation to the housing and construction sectors.
InvestingPro Insights
With Sherwin-Williams (NYSE:SHW) showing robust performance and a positive outlook from analysts, it's worth noting that the company has a track record of rewarding investors, as evidenced by its 46-year history of dividend payments and a notable 18.18% dividend growth in the last twelve months as of Q1 2024.
Moreover, Sherwin-Williams is a prominent player in the Chemicals industry, and despite trading at a high earnings multiple with a P/E ratio of 35.8, the company's management has demonstrated confidence through aggressive share buybacks. These actions, coupled with a resilient gross profit margin of 47.3%, underline the company's financial health and its ability to maintain profitability, which analysts predict will continue this year.
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