Sherwin-Williams’s stock performance
Sherwin-Williams has made a strong comeback after being down in the negative territory. As of September 25, Sherwin-Williams has gained 12.6% year-to-date and has outperformed the broader market representative S&P 500 (SPY), which has gained 9.0%. PPG Industries (PPG) and Axalta (AXTA) have declined 4.5% and 8.7%, respectively, while RPM International (RPM) has gained 27.8%.
Sherwin-Williams posted strong second-quarter earnings. The company reported an adjusted EPS of $5.73 and beat analysts’ expectations. The adjusted EPS reflected 26.8% growth on a year-over-year basis. Sherwin-Williams also reported record second-quarter revenues of $4.77 billion. The strong earnings trend is expected to continue in upcoming quarters due to continued synergy gains from the Valspar acquisition. However, the continued increase in raw material and freight charges could be a challenge for the company.
Sherwin-Williams revised its fiscal 2018 adjusted EPS. The company expects the fiscal 2018 adjusted EPS to be $19.05–$19.35—compared to the earlier guidance of $18.35–$18.95. If Sherwin-Williams continues to beat analysts’ expectations, the stock price could continue to increase.
Moving averages and RSI
The strong gains in Sherwin-Williams’s stock price caused the company to trade 9.0% above the 100-day moving average price of $426.10. Sherwin-Williams’s 14-day RSI (relative strength index) of 47 indicates that the stock isn’t overbought or oversold.