Outlook for US Sherwin-Williams raised on housing, feedstock

26 June 2012 18:39  [Source: ICIS news]

HOUSTON (ICIS)--A stock analyst raised quarterly and annual earnings targets for Sherwin-Williams on Tuesday based on trends in US housing and construction and declines in raw-material costs.

Ivan Marcuse at KeyBanc Capital Markets said trends in the second quarter remain positive, with residential turnover and construction showing modest growth.

Marcuse also cited falling raw material costs - notably in propylene and crude-related resins - as a positive sign for the paint producer.

While the cost of major paint ingredient titanium dioxide (TiO2) continues to rise for Sherwin-Williams, Marcuse said it is rising at a lower year-on-year rate than in 2011.

The KeyBanc analyst said better volume growth and slightly improved margins supported a raise in Sherwin-Williams’s Q2 earnings estimate to $2.16, a 4% increase over the previous $2.07.

KeyBanc also raised the paint producer’s annual earnings estimate for 2012 to $6.35 per share, up by 2% from the previous $6.20, and for 2013 to $7.40, a nearly 6% increase over the previous $7.00.

By: Lane Kelley
+1 713 525 2653

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