Sherwin-Williams (NYSE:SHW) might be front of mind when it comes to painting your house, but how does it fare as an investment? Well, a new upgrade from analysts certainly helps its credibility as an investment, and investors took it to heart. Shares were up fractionally in the closing minutes of Thursday’s trading. KeyBanc Capital Markets analyst Aleksey Yefremov noted that things were looking to improve for the paint provider.
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Yefremov noted that “…most major macro indicators appear at trough and are set to improve.” These included things like housing turnover and housing starts as well as industrial production, all the kinds of things that would call for a coat of paint. That was enough for Yefremov to upgrade Sherwin-Williams from Sector Weight to Overweight instead.
It’s worth noting that Yefremov is a 4.6-star analyst with a 57% success rate and an average return of 8.8% per rating.
“Demand Choppiness” Still Hitting Markets
Certainly, Yefremov’s assessment should be encouraging to investors. But it’s also clear that the trough he referred to may still be in play for a while. The first-quarter earnings report for Sherwin-Williams proved that as the Consumer Brands segment saw a roughly 7% drop against the same time the previous year. Performance coatings also lost ground, slipping from $1.71 billion this time last year to $1.68 billion.
Interestingly, while North American demand proved weaker than expected, a surge in demand from the European sector proved to be Sherwin-Williams’ saving grace. As a result, an overall level of “demand choppiness” was still in play, according to Sherwin-Williams brass.
Is Sherwin-Williams a Buy, Sell, or Hold?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on SHW stock based on 13 Buys, six Holds, and one Sell assigned in the past three months, as indicated by the graphic below. After a 35.08% rally in its share price over the past year, the average SHW price target of $346.19 per share implies 13.49% upside potential.
Is SHW the Right Stock to Buy for Passive Income?
Before you hurry to invest in SHW, think about the following:
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