Sherwin-Williams: Strong Efficiency and Pricing Strategies Drive Buy Rating Amid Market Challenges

BMO Capital analyst John McNulty has reiterated their bullish stance on SHW stock, giving a Buy rating yesterday.

John McNulty’s rating is based on Sherwin-Williams Company’s demonstrated ability to enhance efficiency and manage costs effectively, which is expected to continue through FY25. The company has shown strong pricing strategies, particularly in its PSG segment, and plans to extend these strategies to its PCG and CBG segments, which should drive incremental price increases in the coming quarters. Additionally, Sherwin-Williams has successfully leveraged data and simplicity to improve gross margins and reduce SG&A expenses, positioning it well to meet its financial targets despite a challenging demand environment.
Moreover, Sherwin-Williams is not expected to face significant direct impacts from tariffs, as it primarily manufactures in the regions where its products are sold. While there may be some pressure in areas like applicators and resins, the company plans to counteract these with pricing adjustments and cost reductions. The company’s ability to maintain margins through cost savings and efficiency gains, coupled with anticipated market share gains and a resilient housing market, supports the expectation that Sherwin-Williams will outperform the market in the coming years, justifying the Buy rating.

According to TipRanks, McNulty is a 2-star analyst with an average return of 0.3% and a 47.11% success rate. McNulty covers the Basic Materials sector, focusing on stocks such as DuPont de Nemours, Air Products and Chemicals, and Ecolab.

In another report released yesterday, Mizuho Securities also maintained a Buy rating on the stock with a $400.00 price target.