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Sherwin-Williams (SHW) Hits 52-Week High: What's Driving It?

Zacks Equity Research

Shares of The Sherwin-Williams Company SHW scaled a fresh 52-week high of $598.25 on Jan 21, before closing the session at $593.06.

The company has a market cap of around $54.7 billion. Average volume of shares traded in the past three months was around 480.9K. The company has an expected long-term earnings per share (EPS) growth rate of 11.9%.

The stock has surged 50.8% in the past year compared with the industry’s 48.9% rally.



What’s Driving Sherwin-Williams?

Upbeat view, strong demand in domestic market and synergies of Valspar acquisition are major factors driving the company.

In October 2019, Sherwin-Williams stated that it expects low single digit percentage increase in net sales for 2019 on a year-over-year basis. The company expects EPS in the range of $17.07-$17.47 for 2019 compared with $11.67 in 2018. It also raised its adjusted EPS guidance for 2019 to the range of $20.90-$21.30.

Sherwin-Williams is seeing strong demand in its domestic end-use markets and remains committed to retail operation expansion. It is focused on capturing a larger share of its end-markets.

The company is also benefiting from consistent strength in architectural paint markets in North America. Its third-quarter sales were driven by increased paint sales volume in North American stores and higher selling prices, which more than offset weak demand across certain end-markets outside the United States.

Moreover, the company is gaining from synergies of the Valspar acquisition. The company expects to end 2019 at annual run rate synergies of around $415 million.

The company’s cost-control initiatives, working capital reductions, supply chain optimization and productivity improvement are also supporting its margins.

The Sherwin-Williams Company Price and Consensus

 

The Sherwin-Williams Company Price and Consensus
The Sherwin-Williams Company Price and Consensus

The Sherwin-Williams Company price-consensus-chart | The Sherwin-Williams Company Quote

 

Zacks Rank & Key Picks

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

Few better-ranked stocks in the basic materials space are Daqo New Energy Corp DQ, Royal Gold, Inc RGLD and Bunge Limited BG, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Daqo New Energy has projected earnings growth rate of 326.3% for 2020. The company’s shares have surged 77.5% in the past year.

Royal Gold has an estimated earnings growth rate of 83.5% for fiscal 2020. Its shares have returned 39.6% in the past year.    

Bunge has an expected earnings growth rate of 30.7% for 2020. The company’s shares have gained 7.1% in the past year.

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