How The Sherwin-Williams Company (SHW) Works From A Technical Perspective

The Sherwin-Williams Company (NYSE:SHW) finished Friday with a subtraction of -$0.16 to close at $306.62, a downside of -0.05 percent. An average of 777,020 shares of common stock have been traded in the last five days. There was a gain of $10.23 in the past week, and it reached a new high 35 times over the past 12 months. The last 20 days have seen an average of 1,223,400 shares traded, while the 50-day average volume stands at 1,042,548.

SHW stock has increased by 4.20% in the last month. The company shares reached their 1-month lowest point of $272.01 on 09/29/21. With the stock rallying to its 52-week high on 09/03/21, shares of the company touched a low of $218.06 and a high of $310.43 in 52 weeks. It has reached a new high 32 times so far this year and achieved 25.17% or $61.65 in price. In spite of this, the price is down -1.23% from the 52-week high.

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Insider Transactions

40 days have passed since The Sherwin-Williams Company (SHW) last reported insider trading activity. Sladek Joseph F, who is Pres. & GM, Glob. Supply Chain, most recently acquired $432 shares at $302.32 per share on Sep 13. In this transaction, the insider spent $130,602. SVP – Corp Strategy & Devel., Young Bryan J, disposed of 1,662 shares at a price of $303.75 on Sep 13. The insider now owns more than $504,832 worth of shares. Prior to that, SVP, Strategic Initiatives IPPOLITO PETER J. went on to Sale 12,390 shares at $302.42 each on Aug 26. An amount of $3,746,984 was transacted.

Valuation Metrics

The Sherwin-Williams Company (SHW) has a trailing price-to-earnings (P/E) ratio of 38.42, which compares with the 17.00 for the broader industry and 13.81 for the sector. In the last five years, The Sherwin-Williams Company’s PE ratio has ranged between 44.26 and 18.28. The stock’s beta is 1.06. Other valuation ratios to consider include the trailing price-to-sales (P/S) ratio at 4.05, the price-to-book (PB) ratio at 28.36, and the price-to-cash flow ratio at 29.68.

The Sherwin-Williams Company pays a $2.20 dividend per share annually. It offers a dividend yield of 0.72%. The company has a payout ratio of 24.50%. The company’s most recent quarterly dividend payment was $0.55 a share, without any change from last year. Its dividend has been increased for the last 41 consecutive years with the latest increase dividend $0.1033 reported on Wednesday April 21 2021.Dividends have grown by 57.65% each year over the last three years.

The quick ratio of The Sherwin-Williams Company for the three months ended June 29 was 0.50, and the current ratio was 0.80, indicating that the company is not able to meet its debt obligations. Further, the company has a long term debt to equity ratio of 2.68 and a total debt to equity ratio of 3.19 for the quarter ending June 29. The Sherwin-Williams Company’s EBITDA margin for the year ending June 29 is 20.99%, while its operating margin for the same period stands at 13.60%. Its gross profit as reported stood at $8.68 billion compared to revenue of $18.36 billion.

For investors, determining the potential profitability of the investment also depends on the performance of the company’s management. In the past 12 months, The Sherwin-Williams Company’s return on assets was 10.60%. For the broader industry, ROE averaged 8.64 over the past year.

Earnings Surprise

For the three-month period that ended June 29, The Sherwin-Williams Company had $7.6 billion in total debt. In the quarter under review, the net income was up than the previous quarter. The company posted a net income of $648.6 million in the quarter, while revenues were grew 8.13%. The analyst consensus anticipated The Sherwin-Williams Company’s latest quarter earnings to come in at $2.68 per share, but it turned out to be $2.65, a -1.10% surprise. For the quarter, EBITDA amounted to $1.05 billion. Shareholders own equity worth $263.3 million.

Technical Picture

From a technical analysis perspective, let’s take a brief look at The Sherwin-Williams Company (SHW) price momentum. RSI 9-day as of the close on 22 October was 74.89%, suggesting the stock is Overbought, with historical volatility in this time frame at 9.85%.

As of today, SHW’s price is $302.18 +3.45% or $10.23 from its 5-day moving average. SHW is currently trading +5.08% higher than its 20-day SMA and +8.57% higher than its 100-day SMA. However, the stock’s current price level is +0.96% above the SMA50 and +25.13% above the SMA200.

The stochastic %K and %D were 97.09% and 96.33%, respectively, and the average true range (ATR) was 5.14. With the 14-day stochastic at 92.19% and the average true range at 5.31, the RSI (14) stands at 66.72%. The stock has reached 7.17 on the 9-day MACD Oscillator while the 14-day reading was at 9.48.

Analyst Ratings

Mizuho launched coverage on The Sherwin-Williams Company (NYSE: SHW) in its analyst report released on October 13, 2021. The firm assigned the stock a a Buy rating. The consensus rating for The Sherwin-Williams Company (SHW) among analysts is Overweight. According to current brokerage recommendations, 1 brokerage firm advise that investors sell SHW, while 12 suggest investors hold. There are 0 analysts who rate the stock as underweight. The stock is rated overweight by 2 analysts, while 14 others rate it as a “buy”.

What is SHW’s price target for the next 12 months?

Analysts predict a range of price targets between $278.00 and $352.00, with a median target of $312.50. Taking a look at these predictions, the average price target given by analysts for The Sherwin-Williams Company (SHW) stock is $313.27.


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