The Sherwin-Williams Company Just Missed Earnings - But Analysts Have Updated Their Models

The Sherwin-Williams Company (NYSE:SHW) just released its latest quarterly report and things are not looking great. Sherwin-Williams missed analyst forecasts, with revenues of US$5.4b and statutory earnings per share (EPS) of US$1.97, falling short by 2.4% and 5.8% respectively. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.

Check out our latest analysis for Sherwin-Williams

Taking into account the latest results, the current consensus from Sherwin-Williams' 26 analysts is for revenues of US$23.6b in 2024. This would reflect a credible 2.9% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to grow 11% to US$10.60. In the lead-up to this report, the analysts had been modelling revenues of US$23.8b and earnings per share (EPS) of US$10.77 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$337. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. There are some variant perceptions on Sherwin-Williams, with the most bullish analyst valuing it at US$400 and the most bearish at US$219 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Of course, another way to look at these forecasts is to place them into context against the industry itself. It's pretty clear that there is an expectation that Sherwin-Williams' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 3.9% growth on an annualised basis. This is compared to a historical growth rate of 6.6% over the past five years. Compare this to the 128 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.3% per year. Factoring in the forecast slowdown in growth, it looks like Sherwin-Williams is forecast to grow at about the same rate as the wider industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. The consensus price target held steady at US$337, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Sherwin-Williams going out to 2026, and you can see them free on our platform here.

Don't forget that there may still be risks. For instance, we've identified 1 warning sign for Sherwin-Williams that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.