Higher demand for materials and a better-than-expected housing market could boost Sherwin-Williams, according to BMO Capital Markets. The firm upgraded the paint maker to outperform the market on Monday, with a $275 per share price target. BMO’s forecast implies an increase of just over 11% from the stock’s close at $247.04 on Friday. Sherwin-Williams shares have gained more than 4% year to date. SHW YTD mountain Sherwin-Williams shares are up about 4% since the start of the year. BMO analyst John McNulty said a slightly warmer housing market supports upgrading the company to earnings per share in 2024 and 2025. He added that Sherwin-Williams could add 40 basis points to pre-tax margins as well. as 80 basis points to EBITDA margins, which will increase “likely to prove conservative given price/commodity dynamics.” “With growing conviction in our earlier consensus estimates and a belief that there may be an upside to our estimates given the numerous tailwinds (short-term housing premiums in the longer term) that could drive strong momentum in Earnings and stocks, we believe the risk/reward ratio was compelling relative to other names in the chemical space (where the numbers may be coming down), and as such, we are raising our rating to Outperform,” McNulty said. — CNBC’s Michael Bloom contributed to this report.
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