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Sherwin-Williams Productivity Gains Could Drive Upside

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CLSA raised its EPS estimates on Sherwin-Williams Co (NYSE: SHW) on productivity gains of Valspar despite tough macro environment.

The brokerage increased its 2017 and 2018 pro-forma EPS estimates for Sherwin to $15.10 and $17.65 from $15.00 and $17.55 on Valspar's recent results.

"While Valspar's end markets remains uneven, we're encouraged by productivity gains. We believe the synergy targets are easily achievable after adjusting for potential divestitures. And we expect there to be upside to legacy Valspar margins once that business is housed in the Sherwin portfolio," analyst Nils-Bertil Wallin wrote in a note.

Wallin says the productivity gains from Valspar and potential optimization of legacy assets through rationalization and higher throughput should offset the limited margin expansion in legacy Valspar business.

Wallin has a Buy rating and $350 target price on Sherwin shares, which is currently up 0.46 percent to $275.

Latest Ratings for SHW

DateFirmActionFromTo
Nov 2019DowngradesBuyHold
Nov 2019DowngradesBuyNeutral
Nov 2019Initiates Coverage OnHold

View More Analyst Ratings for SHW
View the Latest Analyst Ratings

Posted-In: CLSA Nils-Bertil WallinAnalyst Color Price Target Reiteration Analyst Ratings

 

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