What's in Store for Sherwin-Williams (SHW) in Q4 Earnings?
The Sherwin-Williams Company SHW is scheduled to release fourth-quarter 2023 results before the opening bell on Jan 25.
The company beat the Zacks Consensus Estimate for earnings in all of the last four quarters, the average surprise being 12.6%. It pulled off an earnings surprise of 15.5% in the last reported quarter.
Sherwin-Williams' shares have soared 25% in the past year compared with the industry’s rise of 23.4%.
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What Do the Estimates Say?
The Zacks Consensus Estimate for sales for the to-be-reported quarter is currently pegged at $5,209.9 million, suggesting a fall of around 0.4% from the year-ago reported number.
The Zacks Consensus Estimate for net sales for SHW’s Consumer Brands Group for the fourth quarter is $646 million, implying a rise of 17% year over year.
The Zacks Consensus Estimate for Performance Coatings Group is $1,637 million, which indicates a 1.9% upside. The consensus estimate for Paint Stores Group is $2,931 million, which suggests a decline of 4.6% from the year-ago reported number.
Factors to Watch
Sherwin-Williams is likely to have gained from its actions to expand its retail operations in response to strong domestic demand. The market for auto refinishing is expected to have been stable in the fourth quarter. The company remains focused on acquiring a larger proportion of its end markets, as seen by the increasing number of retail stores.
Sherwin-Williams' cost-cutting initiatives, supply chain efficiency and productivity gains are expected to have supported margins in the quarter to be reported. Efforts to increase selling prices in all segments and gains from acquisitions are also expected to have contributed to its performance. Furthermore, the company's solid cash generation is likely to have provided significant returns to stockholders.
Sherwin-Williams is conducting restructuring actions to improve its Consumer Brands Group, Performance Coatings Group and corporate operations. These initiatives are estimated to result in annual savings of $50-$70 million, with approximately 75% of the anticipated benefits likely to have been realized by the end of 2023. In the fourth quarter, the company's cost-cutting measures are likely to have resulted in margin benefits.
Zacks Model
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 SHW is -1.67%. The Zacks Consensus Estimate for earnings for the fourth quarter is currently pegged at $1.80. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Sherwin-Williams currently carries Zacks Rank #2.
The Sherwin-Williams Company Price and EPS Surprise
The Sherwin-Williams Company price-eps-surprise | The Sherwin-Williams Company Quote
Stocks That Warrant a Look
Here are some companies in the basic materials space you may want to consider, as our model shows these have the right combination of elements to post an earnings beat this quarter:
Carpenter Technology Corporation CRS, slated to release its earnings on Jan 25, has an Earnings ESP of +0.59% and a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for CRS’ fiscal second-quarter earnings per share is currently pegged at 85 cents.
Agnico Eagle Mines Limited AEM, slated to release earnings on Feb 15, has an Earnings ESP of +11.96% and carries a Zacks Rank #3 at present.
The consensus mark for AEM’s fourth-quarter earnings is currently pegged at 46 cents.
International Paper Company IP, slated to release earnings on Feb 1, has an Earnings ESP of +1.74% and carries a Zacks Rank #1 at present.
The consensus mark for IP’s fourth-quarter earnings is currently pegged at 34 cents.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
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The Sherwin-Williams Company (SHW) : Free Stock Analysis Report
International Paper Company (IP) : Free Stock Analysis Report
Carpenter Technology Corporation (CRS) : Free Stock Analysis Report
Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
