The Sherwin-Williams Company SHW is scheduled to release fourth-quarter 2024 results before the opening bell on Jan. 30.

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The company beat the Zacks Consensus Estimate for earnings in two of the last four quarters while missing twice, with the average negative surprise being 0.7%.

Sherwin-Williams' shares have gained 18.3% in the past year against the industry’s decline of 16.1%.

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What Do Estimates for SHW Say?

The Zacks Consensus Estimate for sales for SHW for the to-be-reported quarter is currently pegged at $5,316 million, suggesting a rise of around 1.2% from the year-ago reported number.

The Zacks Consensus Estimate for net sales for SHW’s Consumer Brands Group for the fourth quarter is $644.6 million, implying a decline of 6.9% year over year.

The Zacks Consensus Estimate for Performance Coatings Group is $1,616.4 million, which indicates a 0.1% rise. 

The consensus estimate for Paint Stores Group is $3,048 million, which suggests an increase of 3.5% from the year-ago reported number.

Factors at Play for SHW 

Sherwin-Williams is pursuing aggressive cost-cutting initiatives, optimizing its supply chain and focusing on productivity improvements, all of which are expected to have supported margins in the fourth quarter. Efforts to enhance selling prices as well as acquisition gains, are likely to have aided the company's profitability. 

The DIY market's weakness is expected to have weighed on Consumer Brands Group's fourth-quarter revenues. In North America, the DIY market remains under pressure from inflation and weak existing house sales. Continued project spending delays are also likely to have had an adverse impact on the property management sector.

Sherwin-Williams faces challenges in certain areas of its Performance Coatings Group. General Industrial continues to witness impediments in the heavy equipment and transportation segments. Revenues from these businesses are expected to have remained under pressure in the fourth quarter. 

The company’s performance in the to-be-reported quarter is also likely to have been hampered by recent hurricanes in the Southeast United States. Disruptions from hurricanes and store closures are expected to have affected its fourth-quarter performance. 

What Our Model Unveils for SHW

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 -2.43%. This is because the Most Accurate Estimate stands at $2.02 while the Zacks Consensus Estimate is pegged at $2.07. 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 #4 (Sell).

Basic Materials 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:

ATI Inc. ATI, slated to release its earnings on Feb. 4, has an Earnings ESP of +3.91% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here. The consensus estimate for ATI’s fourth-quarter earnings per share is currently pegged at 60 cents.

Avient Corporation AVNT, slated to release earnings on Feb. 13, has an Earnings ESP of +0.11% and carries a Zacks Rank #3 at present. The consensus mark for AVNT’s fourth-quarter earnings is currently pegged at 48 cents.

DuPont de Nemours Inc. DD, slated to release earnings on Feb. 11, has an Earnings ESP of +0.06% and carries a Zacks Rank #3 at present. The consensus mark for DD’s fourth-quarter earnings is currently pegged at 98 cents.




 

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The Sherwin-Williams Company (SHW) : Free Stock Analysis Report

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