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Investing.com - Sherwin-Williams (NYSE:SHW), a prominent player in the Chemicals industry with a market capitalization of $85.35 billion, maintained its Neutral rating from Citi, which reiterated its $385.00 price target despite the company reporting second-quarter earnings below expectations. According to InvestingPro analysis, the stock is currently trading above its Fair Value.
The paint manufacturer posted adjusted earnings per share of $3.38 for the second quarter of 2025, falling short of Citi’s $3.80 estimate and the consensus forecast of $3.81. The company attributed the earnings miss to earlier-than-anticipated building transition costs and targeted growth investments.
Sherwin-Williams reported consolidated sales growth of 0.7% within its guidance range and achieved its twelfth consecutive quarter of year-over-year gross margin expansion of approximately 60 basis points. However, administrative losses of $(340) million significantly exceeded Citi’s expectations of $(285) million.
The Performance Coatings Group (PSG) saw sales increase 2.3% year-over-year, with mid-single-digit price/mix improvements offset by low-single-digit volume declines. Both the Consumer Brands Group (CBG) and Performance Coatings Group (PCG) posted segment profit declines year-over-year on lower sales.
Sherwin-Williams updated its fiscal year 2025 sales guidance to a range of low-single-digit decline to low-single-digit growth, while adjusting its earnings per share guidance to $11.35 at the midpoint, down from the previous midpoint of $11.85 and below the consensus estimate of $11.89.
In other recent news, Sherwin-Williams announced a regular quarterly dividend of $0.79 per share, payable on September 5, 2025, to shareholders of record by August 15, 2025. Evercore ISI has reiterated its Outperform rating for Sherwin-Williams, setting a price target of $400.00 ahead of the company’s second-quarter earnings report. The research firm considers the consensus earnings per share estimate of $3.80 for the second quarter to be reasonable, although it has slightly reduced its estimate to $3.75. Evercore ISI also adjusted its full-year earnings per share estimate to $11.85, aligning with the midpoint of Sherwin-Williams’ guidance range.
Conversely, Citi downgraded Sherwin-Williams from Buy to Neutral, lowering the price target to $385.00 due to concerns about the U.S. housing market’s recovery. Citi analysts are skeptical about a significant recovery in the housing market in the latter half of 2025, citing elevated mortgage rates as a primary concern. Additionally, the home improvement sector is experiencing stable yet soft trends as consumer confidence wanes, according to a KeyBanc survey. Cost inflation and labor shortages are also noted as growing concerns for contractors in the sector.
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