The Sherwin-Williams Company SHW is set to release first-quarter 2020 results on Apr 29, before the opening bell.
The company delivered a negative earnings surprise of 2.9% in the last reported quarter. It beat the Zacks Consensus Estimate in two of the last four quarters, while missed in the other two. In this timeframe, it delivered a positive surprise of roughly 0.7%, on average.
The company’s first-quarter results are expected to reflect the benefits from a favorable demand environment in North America. However, soft industrial demand in non-domestic markets is likely to have affected its performance.
Sherwin-Williams’ shares have gained 12.1% in the past year compared with the industry’s 11.7% growth.
Let’s see how things are shaping up for this announcement.
What do the Estimates Indicate?
The company, last month, said that it continues to project a 2-5% year over year rise in net sales for the first quarter.
The Zacks Consensus Estimate for first-quarter total sales for Sherwin-Williams is currently pegged at $4,089 million, which suggests a rise of 1.2% from the year-ago quarter’s figure.
The Zacks Consensus Estimate for net sales in the Americas Group segment is currently pegged at $2,265 million, which indicates an increase of 5.1% year over year.
The consensus mark for net sales in the Consumer Brands Group segment is currently pegged at $647 million, which suggests a decline of 1.2% from the year-ago quarter’s tally.
The Zacks Consensus Estimate for net sales in the Performance Coatings Group segment is currently pegged at $1,225 million, which calls for a decline of 0.5% year over year.
Some Factors to Watch For
The company’s first-quarter results are likely to have benefited from sustained strength in architectural paint markets in North America. Sherwin-Williams is seeing strong demand in its domestic end-use markets and remains committed to expand its retail operations. Higher paint sales volumes are likely to have supported sales and margins in the Americas Group segment in the quarter to be reported.
Benefits of cost control and productivity improvement initiatives as well as pricing actions are also expected to reflect on the company’s first-quarter margins.
However, soft demand in non-domestic markets is likely to have hurt sales in the Performance Coatings Group unit in the first quarter. The coronavirus pandemic is expected to have affected industrial demand in non-domestic regions in the March quarter.
The Sherwin-Williams Company Price and EPS Surprise
The Sherwin-Williams Company price-eps-surprise | The Sherwin-Williams Company Quote
Our proven model does not conclusively predict an earnings beat for Sherwin-Williams this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. But that’s not the case here.
Earnings ESP: Earnings ESP for Sherwin-Williams is -3.96%. This is because the Most Accurate Estimate is currently pegged at $3.85 while the Zacks Consensus Estimate stands at $4.01. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Sherwin-Williams carries a Zacks Rank #3.
Stocks Poised to Beat Estimates
Here are some companies that you may want to consider as our model shows they have the right combination of elements to post an earnings beat this quarter:
Verso Corporation VRS, expected to release earnings on May 13, has an Earnings ESP of +20.00% and carries a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Scotts Miracle-Gro Company SMG, scheduled to release earnings on May 6, has an Earnings ESP of +1.49% and carries a Zacks Rank #2.
Franco-Nevada Corporation FNV, scheduled to release earnings on May 6, has an Earnings ESP of +1.38% and carries a Zacks Rank #2.
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The Sherwin-Williams Company (SHW) : Free Stock Analysis Report
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