SHW - Embedded Expectations Analysis - 2018 06 27
The Sherwin-Williams Company (SHW:USA) currently trades near historical highs relative to UAFRS-based (Uniform) Earnings, with a 25.7x Uniform P/E, implying bullish expectations for the firm. However, management has concerns about their expenses, growth, and EPSSpecifically, management may lack confidence in the sustainability of SG&A declines relative to sales, and may also lack confidence in the sustainability of double-digit growth in sales to residential repaint contractors in the U.S. and Canada. Moreover, they may have concerns about their ability to meet their EPS guidance, and may be concerned about their Latin American operations, both in terms of volume and pricing. In addition, they may have concerns about technology in their Packaging business, and may be concerned about their ability to offset higher raw material costs through price increases in their Performance Coatings segment
Sherwin-Williams is engaged in the development, manufacture, distribution and sale of paint, coatings and related products to industrial, commercial and retail customers. The company's segments are: The Americas Group, which markets and sells Sherwin-Williams? and other controlled brand architectural paint and coatings, protective and marine products, OEM product finishes and related products; Consumer Brands Group, which supplies architectural paints, stains, varnishes, and industrial products, among others; and Performance Coatings Group, which develops and sells industrial coatings, automotive refinish, protective and marine coatings, coil coatings, packaging coatings and resins and colorants.
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