What's in Store for Sherwin-Williams This Earnings Season?

The Sherwin-Williams Company SHW is scheduled to release first-quarter 2025 results before the opening bell on April 29.

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 0.6%.

Sherwin-Williams' shares have gained 8.4% in the past year against the industry’s decline of 4.3%.

What Do Estimates for SHW Say?

The Zacks Consensus Estimate for sales for SHW for the to-be-reported quarter is currently pegged at $5,346.5 million, suggesting a decline 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 first quarter is $761.4 million, implying a decline of 6.1% year over year.

The Zacks Consensus Estimate for Performance Coatings Group is $1,645.9 million, which indicates a 2.1% year-over-year fall.

The consensus estimate for Paint Stores Group is $2,919.9 million, which suggests an increase of 1.6% from the year-ago reported number.

Factors at Play for SHW

Sherwin-Williams has been implementing aggressive cost-reduction strategies, streamlining its supply chain and enhancing productivity efforts that are expected to have supported its profit margins in the first quarter. Actions to increase selling prices and gains from acquisitions are likely to have aided profitability.

However, weakness in the DIY market is likely to have adversely impacted the Consumer Brands Group’s revenues in the quarter. In North America, the DIY segment continues to face challenges from inflation and sluggish existing home sales, while ongoing delays in project spending are likely to have affected the property management sector.

Additionally, within the Performance Coatings Group, general industrial continues to experience challenges in the heavy equipment and transportation markets. Demand softness in general industrial is likely to have continued in the first quarter.

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 -1.04%. This is because the Most Accurate Estimate stands at $2.16 while the Zacks Consensus Estimate is pegged at $2.18. 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 #3.

(Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

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 they have the right combination of elements to post an earnings beat this quarter:

Methanex Corporation MEOH, slated to release earnings on April 30, has an Earnings ESP of +4.74% and carries a Zacks Rank #3. The consensus estimate for MEOH’s earnings for the first quarter is currently pegged at $1.25. You can see the complete list of today’s Zacks #1 Rank stocks here.

ATI Inc. ATI, slated to release earnings on May 1, has an Earnings ESP of +2.46% and carries a Zacks Rank #3 at present. The consensus mark for ATI’s first-quarter earnings is currently pegged at 58 cents.

Kinross Gold Corporation KGC, scheduled to release first-quarter earnings on May 6, has an Earnings ESP of +11.07%. The Zacks Consensus Estimate for Kinross Gold's earnings for the first quarter is currently pegged at 22 cents. KGC currently carries a Zacks Rank #2.




 

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This article originally published on Zacks Investment Research (zacks.com).

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