Sherwin-Williams Co reports results for the quarter ended September 30 - Earnings Summary

What happened

Sherwin-Williams reported quarterly adjusted earnings of $3.63 per share, below the $3.68 analysts expected on average. Revenue rose 7.9% to $6.86 billion, beating the $6.78 billion expectation. Reported earnings per share were $3.38 and net income was $821 million.

Confirmed

Global impact / market context

Profit per share came in below what analysts expected even though sales beat forecasts, so the company kept less of each sales dollar as profit than Wall Street hoped. That gap can pressure the share price because investors pay for future profit growth, not just revenue growth.

Analyst inference

Analysts still rate the stock a buy on average, and their median 12-month price target of $392.00 sits about 14.5% above the last close of $335.16. Still, six analysts cut earnings estimates in the last 30 days, suggesting caution on near-term profit.

Analyst inference

What to watch

1. Watch whether more analysts cut earnings estimates, since six negatively revised them in the last 30 days, which means forecasts for future profit are being trimmed and could lower the average target. Confirmed
2. The average analyst rating of buy, made up of 15 buy or strong buy and 14 hold, is a recommendation rather than a fact, so treat it as opinion that can change after this report. Proposed
3. Watch whether sales growth of 7.9% continues to translate into profit, because if costs keep rising faster than revenue, the gap between reported and expected earnings may persist or widen. Analyst inference

Evidence

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