Sherwin-Williams (SHW) Gains But Lags Market: What You Should Know

Sherwin-Williams (SHW) closed the most recent trading day at $277.23, moving +0.8% from the previous trading session. This move lagged the S&P 500's daily gain of 0.95%. Elsewhere, the Dow gained 0.8%, while the tech-heavy Nasdaq lost 0.25%.

Coming into today, shares of the paint and coatings maker had lost 0.7% in the past month. In that same time, the Construction sector gained 2.83%, while the S&P 500 gained 0.1%.

Sherwin-Williams will be looking to display strength as it nears its next earnings release. On that day, Sherwin-Williams is projected to report earnings of $2.78 per share, which would represent year-over-year growth of 4.91%. Our most recent consensus estimate is calling for quarterly revenue of $6 billion, up 11.46% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $9.48 per share and revenue of $21.88 billion. These totals would mark changes of +16.32% and +9.68%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for Sherwin-Williams. Recent revisions tend to reflect the latest near-term business trends. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate remained stagnant within the past month. Sherwin-Williams currently has a Zacks Rank of #3 (Hold).

Looking at its valuation, Sherwin-Williams is holding a Forward P/E ratio of 29.02. For comparison, its industry has an average Forward P/E of 24.87, which means Sherwin-Williams is trading at a premium to the group.

It is also worth noting that SHW currently has a PEG ratio of 2.2. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Paints and Related Products was holding an average PEG ratio of 3.11 at yesterday's closing price.

The Paints and Related Products industry is part of the Construction sector. This group has a Zacks Industry Rank of 105, putting it in the top 42% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Make sure to utilize Zacks.com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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