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The analysts elaborated that the potential upside for Sherwin-Williams (NYSE:SHW) shares seems more challenging, especially given the company’s significant premium compared to its quality peers and other companies in the coatings industry. This observation factored into Jefferies’ decision to downgrade the stock and adjust the price target accordingly.Sherwin-Williams, a major player in the coatings and paint industry with a market capitalization of $90.9 billion, is now positioned with a ’Hold’ rating by Jefferies, reflecting a more cautious outlook on the stock’s performance prospects. The new price target set by the firm is based on a blend of year-end 2026 models, taking into account the evolving economic landscape and its potential impact on the company’s financial outlook. Despite current valuation concerns, the company maintains strong fundamentals with a 48.5% gross profit margin and has demonstrated its commitment to shareholder returns by raising its dividend for 32 consecutive years. For deeper insights into Sherwin-Williams’ valuation metrics and growth prospects, investors can access the comprehensive Pro Research Report available on InvestingPro.
Jefferies analysts pointed to Leading Economic Indicators (LEIs) that have already hinted at a softening outlook for housing turnover in 2025. They further noted that a demand shock due to US policy changes is becoming more likely, which could affect the current forecasts for the company. This reassessment led to a 10% decrease in the 12-18 month target price for Sherwin-Williams shares. This cautious outlook aligns with InvestingPro data showing 11 analysts have recently revised their earnings expectations downward for the upcoming period.
The analysts elaborated that the potential upside for Sherwin-Williams shares seems more challenging, especially given the company’s significant premium compared to its quality peers and other companies in the coatings industry. This observation factored into Jefferies’ decision to downgrade the stock and adjust the price target accordingly.
Sherwin-Williams, a major player in the coatings and paint industry, is now positioned with a ’Hold’ rating by Jefferies, reflecting a more cautious outlook on the stock’s performance prospects. The new price target set by the firm is based on a blend of year-end 2026 models, taking into account the evolving economic landscape and its potential impact on the company’s financial outlook.
In other recent news, Sherwin-Williams announced its acquisition of BASF’s Brazilian architectural paints business for $1.15 billion. This transaction is expected to close in the second half of 2025, pending regulatory approval. Citi analyst Pat Cunningham has resumed coverage of Sherwin-Williams with a Buy rating and a price target of $423, reflecting confidence in the strategic acquisition. Moody’s confirmed that Sherwin-Williams’ ratings remain unaffected by the acquisition, highlighting the company’s strong business model and liquidity. KeyBanc maintained a Sector Weight rating, noting the fair valuation of the deal and potential cost synergies. Meanwhile, RBC Capital Markets adjusted its price target for Sherwin-Williams to $415 from $438, maintaining an Outperform rating. RBC Capital revised its earnings per share estimates, citing potential market share gains and price increases in specific business units. These developments indicate a strategic expansion for Sherwin-Williams, particularly in the Latin American market.
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