JP Morgan lifts Sherwin 2008 profit estimate

18 July 2008 15:11  [Source: ICIS news]

TORONTO (ICIS news)--JP Morgan has raised its earnings per share (EPS) estimate for US paint and coatings major Sherwin-Williams, it said on Friday, citing better-than-expected second-quarter results.

 

The analysts raised their 2008 EPS estimate for Sherwin-Williams to $4.10, from $3.90.

 

This compares with Sherwin’s EPS guidance of $3.60-4.10 for 2008 and the $4.70 it achieved in 2007.

 

“For all of the worries about the coatings sector generally and Sherwin-Williams in particular, Sherwin reported higher second-quarter EPS despite roughly 4% negative volume growth,” JP Morgan said in a research note to clients.

 

While Sherwin’s net profit for the three month ended 30 June was down 15%, its EPS from operations was $1.57 versus $1.52 in the year-ago period and above JP Morgan’s estimate of $1.44, the analysts said.

 

Second-quarter sales and gross profit were higher than expected and compared favourably with its competitors, they added.

 

“We believe Sherwin is increasing market share by virtue of its captive distribution network, and is maintaining a healthy, though lower level of margin.”

 

Recent favourable rulings in lead paint-related lawsuits in Rhode Island and Ohio have also been positive for the company, JP Morgan added.

 

($1 = €0.63)

 

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By: Stefan Baumgarten
+1 713 525 2653

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