Sherwin-Williams Co SHW

Sherwin-Williams Earnings: Residential Repaint Remains Resilient Despite Challenging Housing Market

Wide-moat Sherwin-Williams reported solid second-quarter results that were ahead of our expectations. While net sales grew only 0.5%, the company reported a 20% operating margin, up 220 basis points from a year ago. All three segments reported operating margin expansion year over year and sequentially, largely due to higher selling prices and moderating raw material costs. Do-it-yourself and general industrial end markets remained constrained, but Sherwin experienced solid growth across much of its portfolio in the quarter, led by residential repaint and new residential construction. As such, we've increased our fair value estimate to $233 from $219 per share.