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Investing.com - Citi has reduced its price target on Sherwin-Williams (NYSE:SHW) to $375.00 from $385.00 while maintaining a Neutral rating on the stock. Currently trading at $340.07, the stock appears overvalued according to InvestingPro’s Fair Value model, with analyst targets ranging from $258 to $420.
The firm characterized the current environment as a "critical inflection point" for North American architectural coatings, noting that Sherwin-Williams is investing in customer-facing growth initiatives within its Paint Stores Group while competitors reduce their customer-facing positions and assets. As a prominent player in the Chemicals industry with a market cap of $85 billion and an impressive 47-year dividend payment streak, the company maintains a strong market position despite challenges.
Citi highlighted that macroeconomic conditions are broadly weighing on end-markets, with potential further deterioration expected in the second half of the year for new residential construction, coil with tariff-related uncertainty, and do-it-yourself segments.
While residential repaint backlogs remain stable with a marginal increase in bid activity, Citi noted management’s caveat that projects could be smaller in size, potentially impacting revenue.
On the operational front, Sherwin-Williams now expects modest raw material deflation in the second half of 2025, flattening the full-year impact compared to previous low-single-digit increase expectations, and is continuing some capital investments while delaying spending in other areas.
In other recent news, Sherwin-Williams Co reported its second-quarter earnings for 2025, which did not meet earnings per share (EPS) expectations but slightly exceeded revenue forecasts. The company posted an EPS of $3.38, which was below the anticipated $3.80, resulting in an 11.05% negative surprise. However, Sherwin-Williams reported revenue of $6.31 billion, slightly above the expected $6.30 billion. These earnings results are significant for investors as they provide insights into the company’s financial performance. Additionally, the market reacted to these developments, reflecting the company’s earnings results. Analysts and investors will be closely monitoring how Sherwin-Williams addresses these financial outcomes in the coming quarters. The company’s performance in future earnings reports will likely be scrutinized for any signs of improvement or further challenges.
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