Sherwin-Williams Shares Tumble as Demand Falters
2022.07.27 21:18
Budrigannews.com – Shares of Sherwin-Williams (NYSE:SHW) dropped over 10% Wednesday following the company’s second-quarter earnings report.
SHW missed consensus estimates, posting earnings of $2.41 per share, $0.36 worse than expectations of $2.77. Revenue for the quarter also missed forecasts, coming in at $5.87 billion versus the consensus estimate of $6.03 billion.
SHW shares hit a low of $220.74 following the report before the open.
The company said the slower North America DIY demand trend in its consumer brands group did not improve, and they experienced tight supply in certain resins, which significantly impacted its North America non-paint sales. In addition, internationally, demand deteriorated faster than anticipated in Europe, and there was no meaningful recovery in China following the lifting of Covid lockdowns, meaningfully affecting sales.
As a result of the demand slowdown, the company lowered adjusted net income per share guidance to a range of $8.50 to $8.80 per share.
Following the report, a Morgan Stanley analyst reiterated an Overweight rating and $330 price target on Sherwin-Williams but said they “expect a negative response to both results and outlook, particularly given the company recently reiterated both quarterly and full-year guidance.”
“While the operating environment no doubt remains both challenging and dynamic – as can be seen in peer results as well – we do not believe that the equity market anticipated a miss and a guide lower, both in general and of this magnitude. Rather, we believe that in line and reiterate was expected,” added the analyst.
