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Sherwin-Williams (SHW) Cuts Q3 & FY21 Sales and Earnings View

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The Sherwin-Williams Company SHW lowered its net sales and net income per share guidance for the third quarter and full-year 2021.

The company lowered its third-quarter consolidated net sales guidance to be flat to down modestly from third-quarter 2020 levels. It expects third-quarter 2021 net income per share outlook between $1.80 and $1.90 per share, including 20 cents per share for acquisition-related amortization expense.

Sherwin-Williams also reduced full-year 2021 consolidated net sales guidance to be up by a high single-digit percentage over full year 2020. It lowered full year net income per share guidance in the range of $7.21-$7.41 per share, including 80 cents per share for acquisition-related amortization expense and a loss of 34 cents per share on the Wattyl divestiture.

The company stated that the persistent and industry-wide raw material availability constraints as well as pricing inflation as reported earlier have deteriorated. The company is apprehensive about an improvement in supply or a reduction in raw material pricing for the fourth quarter as expected. It anticipates expects raw material availability issues to hurt its consolidated sales by a high single-digit percentage in the fourth quarter.

Due to these headwinds, the company is narrowing third-quarter sales expectations. For the full year, it expects sales to be up by a high single-digit percentage and adjusted net income per share guidance to be $8.45 at the midpoint of the range.

In addition to the supply challenges, raw material pricing remains high. Sherwin-Williams is raising its full-year raw material inflation outlook to be up a high-teens percentage from last year’s levels.

Shares of Sherwin-Williams have gained 22.6% in the past year compared with a 17.8% rise of the industry.

Zacks Investment Research
Zacks Investment Research

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Zacks Rank & Key Picks

Sherwin-Williams currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Nucor Corporation NUE, The Chemours Company CC and Methanex Corporation MEOH.

Nucor has a projected earnings growth rate of around 534.4% for the current year. The company’s shares have surged 122.4% in a year. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Chemours has an expected earnings growth rate of around 86.4% for the current year. The company’s shares have gained 40.1% in the past year. It currently carries a Zacks Rank #2 (Buy).

Methanex has an expected earnings growth rate of around 409.3% for the current fiscal. The company’s shares have surged 91.7% in the past year. It currently flaunts a Zacks Rank #1.


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The SherwinWilliams Company (SHW) : Free Stock Analysis Report

Nucor Corporation (NUE) : Free Stock Analysis Report

Methanex Corporation (MEOH) : Free Stock Analysis Report

The Chemours Company (CC) : Free Stock Analysis Report

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