Sherwin-Williams (SHW) Earnings Preview: What to Expect on October 22nd
Get ready for another earnings season highlight as Sherwin-Williams, the undisputed leader in architectural paint within the United States, prepares to unveil its quarterly financial results on Tuesday, October 22nd. Wall Street analysts are anticipating a strong showing from the company, with eyes glued to the earnings per share (EPS) figure and the eagerly awaited guidance for the upcoming quarter.
Analysts’ Expectations and Market Sentiment
The market is buzzing with anticipation as analysts predict Sherwin-Williams will report an EPS of $3.54. Investors are hopeful for a beat on these estimates and optimistic guidance that signals a strong future for the company. It’s important to remember that guidance can significantly impact stock prices, making it a key factor to watch for during the earnings call.
Looking Back at Recent Performance
Sherwin-Williams has a history of exceeding expectations. In the previous quarter, the company surpassed EPS estimates by $0.22. However, this positive news was followed by a 3.62% drop in the share price the next day. This highlights the volatility that can occur in the immediate aftermath of an earnings release.
Here’s a closer look at Sherwin-Williams’s past performance and the resulting price changes:
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Q2 2024:
EPS Estimate: 3.48, EPS Actual: 3.70, Price Change: -4.0%*
Q1 2024:
EPS Estimate: 2.21, EPS Actual: 2.17, Price Change: 0.0%*
Q4 2023:
EPS Estimate: 1.80, EPS Actual: 1.81, Price Change: -1.0%*
Q3 2023:
EPS Estimate: 2.77, EPS Actual: 3.20, Price Change: 2.0%Sherwin-Williams’s Bullish Stock Trajectory
As of October 18th, Sherwin-Williams shares were trading at $388.36. Over the past 52 weeks, the stock has seen a remarkable surge of 63.68%. This positive trend suggests that long-term shareholders are optimistic about the company’s prospects, adding further anticipation to the upcoming earnings release.
Analyst Insights and Market Expectations
To truly understand the market’s outlook on Sherwin-Williams, it’s crucial to consider the consensus views of analysts. They have assigned Sherwin-Williams a consensus rating of “Outperform” with 16 ratings. The average one-year price target is set at $394.31, indicating a potential 1.53% upside for the stock.
Comparing Sherwin-Williams to its Peers
To gain further context, let’s compare Sherwin-Williams to three prominent industry players: Ecolab, DuPont de Nemours, and PPG Indus. Here’s a breakdown of their analyst ratings and average one-year price targets:
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Ecolab:
Rating: Outperform, Average 1-Year Price Target: $274.92 (potential 29.21% downside)*
DuPont de Nemours:
Rating: Neutral, Average 1-Year Price Target: $93.2 (potential 76.0% downside)*
PPG Indus:
Rating: Outperform, Average 1-Year Price Target: $147.25 (potential 62.08% downside)Key Takeaways from Peer Analysis
Sherwin-Williams stands out among its peers with a higher gross profit and return on equity. While it falls in the middle for revenue growth, its overall performance suggests a strong position within the industry.
Getting to Know Sherwin-Williams: A Deeper Dive
Sherwin-Williams is more than just a paint company. It’s the largest provider of architectural paint in the U.S., boasting over 5,000 stores and offering premium paint options at higher price points compared to most competitors. The company also extends its reach by selling paint-related products in big-box stores and providing coatings for original equipment manufacturers.
Financial Insights: Analyzing Sherwin-Williams’s Metrics
Market Capitalization:
Sherwin-Williams’s market capitalization surpasses industry benchmarks, reflecting its significant size and strong market presence.Revenue Growth:
The company exhibited positive growth over the last 3 months, achieving a revenue growth rate of 0.5% as of June 30th, 2024. This indicates a healthy increase in top-line earnings. However, compared to its peers, its revenue growth lags behind. It achieved a lower growth rate than the average in the Materials sector.Net Margin:
Sherwin-Williams boasts an impressive net margin, surpassing industry averages. With a net margin of 14.19%, the company demonstrates strong profitability and efficient cost management.Return on Equity (ROE):
Sherwin-Williams’s ROE excels beyond industry benchmarks, reaching 24.53%. This highlights robust financial management and efficient use of shareholder equity capital.Return on Assets (ROA):
The company’s exceptional ROA of 3.77% exceeds industry averages, signifying efficient use of assets and strong financial health.Debt Management:
Sherwin-Williams’s debt-to-equity ratio is notably higher than the industry average, at 3.28. This indicates a higher level of financial risk due to its reliance on borrowed funds.Stay Informed with Sherwin-Williams’s Earnings Calendar
To keep track of all earnings releases for Sherwin-Williams, visit the dedicated earnings calendar on our site. This comprehensive resource provides a convenient and timely overview of all important financial announcements.