SHW - Embedded Expectations Analysis - 2020 05 18
The Sherwin-Williams Company (SHW:USA) currently trades above corporate averages relative to UAFRS-based (Uniform) earnings, with a 26.8x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about brand consolidation, digital platform initiatives, and growthSpecifically, management may be concerned about underperformance in Australia, their Lowe's partnership execution, and the potential of their digital platform investments. In addition, they may be exaggerating their ability to provide customers with differentiated solutions, assist auto customers with their facility throughput, and retain customers through their brand consolidation. Furthermore, they may lack confidence in their ability to meet their adjusted diluted EPS guidance, sustain sales and gross profit growth, and continue to realize synergy and cost control benefits, particularly in their Performance Coating Group. Moreover, they may be downplaying concerns about petrochemical feedstock prices and supply chain disruptions, and they may have concerns about their growth opportunities, new reps, and home center innovation investments and pricing increases
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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