Shares of The Sherwin-Williams Company SHW scaled a new 52-week high of $266.51 on Jun 30, before closing at $265.52.
Over the past year, the SHW stock has gained 12.8% compared with a 12.6% rise of the industry.
Image Source: Zacks Investment Research
Domestic Demand, Cost Actions Aid SHW
Sherwin-Williams, a Zacks Rank #3 (Hold) stock, remains committed to growing its retail operations and is witnessing strong demand in domestic markets. The Paint Stores Group division is seeing increased architectural sales volumes. The growing number of retail stores is a clear indication that the company has invested in capturing a greater percentage of its end markets. It opened 72 net new stores in 2022 and 80 to 100 new stores are likely to open in the United States and Canada in 2023. It added four net new stores in the first quarter of 2023.
SHW's cost-cutting measures, working capital reductions, supply chain optimization and productivity enhancement are producing margin gains. In order to mitigate cost inflation, especially in raw materials, it continues to pursue pricing actions.
The company is also focusing on cost-cutting through restructuring, which is anticipated to be beneficial in 2023. It anticipates yearly savings of between $50 million and $70 million, 75% of which are anticipated to be achieved by the end of 2023.
Sherwin-Williams has also strengthened its position as a leading paints and coatings provider globally by acquiring Valspar and leveraging its highly complementary offerings, strong brands and innovative technologies. The acquisition expanded SHW's brand portfolio and customer relationships in North America and strengthened its global finishes business. In addition to expanding the company’s global platform in Asia-Pacific and Europe, the Middle East and Africa regions, the buyout added new capabilities in the packaging and coil segments.
Stocks to Consider
Some better-ranked stocks in the Constructions space are Arcosa Inc. ACA, Boise Cascade Company BCC and Cavco Industries Inc. CVCO.
Arcosa is currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.
ACA’ earnings surpassed the Zacks Consensus Estimate in all the last four quarters. It has delivered a trailing four-quarter earnings surprise of 59.9%, on average. The stock has rallied 63.7% over past year.
Boise Cascade currently flaunts a Zacks Rank #1. The Zacks Consensus Estimate for BCC’s current-year earnings has been stable in the past 60 days. It has a trailing four-quarter earnings surprise of 19%, on average. The stock has gained 49.2% over past year.
Cavco, currently carrying a Zacks Rank #2 (Buy), has gained 46.2% over past year. The company’s earnings beat the Zacks Consensus Estimate in all the last four quarters. It has a trailing four-quarter earnings surprise of 40.2%, on average.
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Free: See Our Top Stock and 4 Runners Up >>The Sherwin-Williams Company (SHW) : Free Stock Analysis Report
Boise Cascade, L.L.C. (BCC) : Free Stock Analysis Report
Cavco Industries, Inc. (CVCO) : Free Stock Analysis Report
Arcosa, Inc. (ACA) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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