Stocks of The Sherwin-Williams Company (SHW) are poised to climb above their peers

The Sherwin-Williams Company (NYSE: SHW) stock jumped 1.58% on Friday to $243.09 against a previous-day closing price of $239.32. With 1.02 million shares changed hands, the volume of the stock remained lighter than its average volume of 1.8 million shares. During the session, the Specialty Chemicals company that operates in wider Basic Materials sector, reached to the highest price of $244.76 whereas the lowest price it dropped to was $239.57. The 52-week range on SHW shows that it touched its highest point at $354.15 and its lowest point at $214.22 during that stretch. It currently has a 1-year price target of $273.65. With its current market cap of 60.41 billion, SHW has annualized dividend of $2.40 while the current yield stands at 0.99%. Beta for the stock currently stands at 1.07.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of SHW was up-trending over the past week, with a rise of 0.02%, but this was up by 0.14% over a month. Three-month performance dropped to -13.96% while six-month performance fell -17.41%. The stock lost -17.94% in the past year, while it has lost -30.97% so far this year. A look at the trailing 12-month EPS for SHW yields 6.65 with Next year EPS estimates of 10.57. For the next quarter, that number is 2.71. This implies an EPS growth rate of -5.20% for this year and 19.47% for next year. EPS is expected to grow by 13.74% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of 11.80%.

Float and Shares Shorts:

At present, 258.10 million SHW shares are outstanding with a float of 238.25 million shares on hand for trading. On Jul 14, 2022, short shares totaled 2.83 million, which was 1.09% higher than short shares on Jun 14, 2022. In addition to Mr. John G. Morikis as the firm’s Chairman & CEO, Ms. Heidi G. Petz serves as its Pres & COO.

Institutional Ownership:

Through their ownership of 79.20% of SHW’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 8.94% of SHW, in contrast to 43.84% held by mutual funds. Shares owned by individuals account for 34.93%. As the largest shareholder in SHW with 7.57% of the stake, The Vanguard Group, Inc. holds 19,693,294 shares worth 19,693,294. A second-largest stockholder of SHW, BlackRock Fund Advisors, holds 11,454,640 shares, controlling over 4.40% of the firm’s shares. SSgA Funds Management, Inc. is the third largest shareholder in SHW, holding 10,774,741 shares or 4.14% stake. With a 2.65% stake in SHW, the Vanguard Total Stock Market Index is the largest stakeholder. A total of 6,904,174 shares are owned by the mutual fund manager. The Vanguard 500 Index Fund, which owns about 2.04% of SHW stock, is the second-largest Mutual Fund holder. It holds 5,296,523 shares valued at 1.19 billion. American Funds New Perspective Fu holds 1.22% of the stake in SHW, owning 3,183,180 shares worth 712.75 million.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for SHW since 29 analysts follow the stock currently. There are 10 analysts who recommend BUY ratings, while 1 suggest SELL ratings. Of the remaining analysts, 15 believe that the stock is worth HOLDING, 2 give it an OVERWEIGHT rating, and 1 thinks that it’s UNDERWEIGHT. In the same way, a target price assigned to a stock can also reveal much about its potential. With SHW analysts setting a high price target of $340.00 and a low target of $225.00, the average target price over the next 12 months is $274.82. Based on these targets, SHW could surge 39.87% to reach the target high and fall by -7.44% to reach the target low. Reaching the average price target will result in a growth of 13.05% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy. SHW will report FY 2022 earnings on 01/26/2023. Analysts have provided yearly estimates in a range of $9.98 being high and $8.38 being low. For SHW, this leads to a yearly average estimate of $8.70. The earnings surprise of a firm occurs when the actual results change from the consensus earnings estimate. The Sherwin-Williams Company surprised analysts by -$0.36 when it reported $2.41 EPS against a consensus estimate of $2.77. The surprise factor in the prior quarter was $0.07. Based on analyst estimates, the high estimate for the next quarter is $3.19 and the low estimate is $2.40. The average estimate for the next quarter is thus $2.64.

Summary of Insider Activity:

Insiders traded SHW stock several times over the past three months with 5 Buys and 2 Sells. In these transactions, 543 shares were bought while 6,866 shares were sold. The number of buy transactions has increased to 56 while that of sell transactions has risen to 19 over the past year. The total number of shares bought during that period was 173,874 while 93,180 shares were sold.

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