5 Home Improvement Stocks to Buy Now

4. The Sherwin-Williams Company (NYSE:SHW)

Number of Hedge Fund Holders: 54

The Sherwin-Williams Company (NYSE:SHW) is an Ohio-based company that is involved in the manufacturing and supply of paint and coatings.

In a note issued to investors on July 28, David Begleiter at Deutsche Bank maintained a ‘Buy’ rating on The Sherwin-Williams Company (NYSE:SHW) stock, with a target price of $275. The target price reflects potential upside of over 16.6% from the closing price as of August 29. The analyst addressed the missed revenue and adjusted EPS estimates for Q2 2022 and commented that the stock would be in the penalty box following the weak results.

However, The Sherwin-Williams Company (NYSE:SHW) guided that it anticipates year-over-year (YoY) revenue growth of low to mid-teens during Q3 2022. Assuming a 12.5% YoY growth from last year’s revenue of $5.15 billion, the expected revenue for Q3 2022 would be $5.79 billion, which is $60 million higher than analysts are forecasting.

In its Q1 2022 investor letter, ClearBridge Investments shared its outlook on The Sherwin-Williams Company (NYSE:SHW). Here’s what the firm said:

“Rounding out our risk-focused stance, we believe the addition of Sherwin-Williams (NYSE:SHW), a manufacturer of paints and coatings for professional, industrial and retail customers, adds further resilience in the current inflationary environment. Paint is a relatively small part of total project input costs which can be passed through with price during inflation, and the company has a track record of successfully managing through periods of increased commodity costs. We are attracted to the company’s durability of growth by operating a strong franchise with both organic growth and consolidation amassing a strong portfolio of brands. We like Sherwin-Williams over competitors in the paint industry due to higher volumes, a domestically focused revenue base and strong relationships with the home builder and pro community. We believe the company will be able to keep pricing and expand margins as commodity pressures ease.”