Sherwin-Williams: Most Analysts Recommend a ‘Buy’

In the past two months, the number of analysts covering Sherwin Williams (SHW) rose from 22 analysts to 23 analysts. Among them, 61% of the analysts have recommended the stock as a “buy,” 35% recommended the stock as a “hold,” and 4% recommended the stock as a “sell.”

Analysts’ consensus suggests that Sherwin-Williams’ 12-month target price is $378.26, which implies a potential return of 11.90% over the closing price of $338 as of August 30, 2017.

Sherwin-Williams’ 2Q17 earnings were marginally below analysts’ expectations mainly due to charges related to the Valspar acquisition. However, its revenues were able to beat analysts’ expectations. Sherwin-Williams completed the Valspar acquisition in 2Q17. Sherwin-Williams will begin the integration, which will start the cost-saving synergy effect. It will drive Sherwin-Williams’ earnings growth. All of these factors could have influenced analysts’ “buy” recommendations on Sherwin-Williams stock.

• UBS (UBS) has recommended a target price of $375, which implies a potential return of 10.90% over the closing price of $338 as of August 30, 2017.
• Credit Suisse (CS) rated Sherwin-Williams as “outperform” and recommended a target price of $375. The target price implies a potential return of 10.90%—compared to the closing price of $338 as of August 30, 2017.
• Longbow rated Sherwin Williams as a “buy,” but it didn’t provide a target price.

Investors looking to hold Sherwin-Williams indirectly can invest in the PowerShares DWA Industrials Momentum Portfolio (PRN). PRN has invested 4.4o% of its portfolio in Sherwin-Williams. The fund also holds Boeing (BA) with a weight of 3.0% as of August 29, 2017.