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Investing.com - BMO Capital has lowered its price target on Sherwin-Williams (NYSE:SHW) stock to $391.00 from $405.00 while maintaining an Outperform rating. The paint manufacturer, currently trading at $343.15 with a market capitalization of $85.9 billion, shows mixed signals according to InvestingPro data, trading at a relatively high P/E ratio of 33.8x.
The price target reduction follows what BMO described as a "notable EPS miss" and guidance cut from the paint manufacturer, though the firm maintains a positive long-term outlook on the company.
BMO Capital highlighted changes in the competitive landscape that are providing Sherwin-Williams opportunities to capture higher pricing, something the firm had identified as a long-term opportunity last year.
The research firm also noted that Sherwin-Williams is positioned to gain market share, supported by increased SG&A spending observed in the second quarter of 2025.
While BMO acknowledged that the significant SG&A increase and slower recovery in housing markets might concern short-term investors, the firm believes "investors with duration will be rewarded" despite these temporary headwinds.
In other recent news, Sherwin-Williams reported its second-quarter earnings for 2025, revealing a miss in earnings per share (EPS) expectations but a slight beat in revenue forecasts. The company posted an EPS of $3.38, which was below the forecasted $3.80, while revenue came in at $6.31 billion, slightly above the expected $6.30 billion. Mizuho (NYSE:MFG) lowered its price target for Sherwin-Williams to $385 from $400, citing weaker-than-expected quarterly results and reduced full-year guidance. Evercore ISI also reduced its price target to $380, highlighting concerns over volume growth despite the company’s growth initiatives. Additionally, Citi adjusted its price target to $375, noting market challenges and Sherwin-Williams’ investment in customer-facing growth initiatives. KeyBanc maintained its Sector Weight rating, citing softer demand in U.S. construction and industrial markets, and lowered its 2025 earnings estimate by 4% following Sherwin-Williams’ own guidance reduction. These developments indicate that Sherwin-Williams is facing a challenging market environment with slower-than-expected demand and volume growth.
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