Sherwin-Williams Rallies 23% in 3 Months: What's Driving the Stock?
The Sherwin-Williams Company’s SHW shares have soared 22.9% in the past three months compared with the S&P 500 and the industry’s growth of 1.2% and 19%, respectively.
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Let’s look at the factors driving the stock’s price appreciation.
What’s Driving Sherwin-Williams Stock?
Sherwin-Williams reported stronger-than-expected earnings for the second quarter of 2024, prompting the company to raise its full-year outlook. Adjusted earnings came in at $3.70 per share, beating the Zacks Consensus Estimate of $3.51. While revenues grew 0.5% year over year to $6,271.5 million, it fell short of the consensus estimate of $6,350.1 million. Revenue growth was driven by increased sales in the Paint Stores and Performance Coatings segments, though lower volumes in the Consumer Brands segment offset these gains.
The Paint Stores Group sales rose 3.5%, benefiting from low-single-digit volume growth and higher prices, with strong performance across all markets except property maintenance. The Performance Coatings Group also posted modest sales growth, bolstered by an acquisition, though currency headwinds and mixed volume performance across regions posed challenges. Meanwhile, the Consumer Brands Group experienced a sales decline due to weaker DIY demand in North America, a divestiture and unfavorable currency fluctuations.
Sherwin-Williams anticipates low-single-digit consolidated sales growth for the third quarter and full year. The company has set its 2024 earnings per share (EPS) forecast between $10.30 and $10.60, with adjusted EPS projected to range of $11.10 to $11.40.
The Zacks Consensus Estimate for 2024 EPS is pegged at $11.47, implying a 10.8% year-over-year increase. In the past four quarters, Sherwin-Williams has delivered an average earnings surprise of 4.5%.
The Sherwin-Williams Company Price and Consensus
The Sherwin-Williams Company price-consensus-chart | The Sherwin-Williams Company Quote
SHW’s Zacks Rank & Key Picks
SHW currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Basic Materials space are Hawkins, Inc.HWKN, Carpenter Technology Corporation CRS and Eldorado Gold Corporation EGO, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Hawkins’ current fiscal-year earnings is pegged at $4.14, indicating a rise of 15.3% from the year-ago level. The Zacks Consensus Estimate for HWKN’s current fiscal-year earnings has increased 12.8% in the past 60 days.The stock has rallied around 101% in the past year.
The Zacks Consensus Estimate for Carpenter Technology’s current-year earnings is pegged at $6.06 per share, indicating a rise of 27.9% from the year-ago level. CRS’ earnings beat the consensus estimate in each of the trailing four quarters, the average earnings surprise being 15.9%. The stock has rallied nearly 114.1% in the past year.
The Zacks Consensus Estimate for Eldorado Gold’s current-year earnings is pegged at $1.35 per share, indicating a year-over-year rise of 136.8%. EGO beat the consensus estimate in each of the trailing four quarters, with the average surprise being 430.3%. The company's shares have surged nearly 63.9% in the past year.
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The Sherwin-Williams Company (SHW) : Free Stock Analysis Report
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