Sherwin-Williams upgraded to Outperform on 'overlooked' positives at Wells Fargo
As previously reported, Wells Fargo analyst Stephen East upgraded Sherwin-Williams to Outperform from Market Perform and raised his price target on the shares to $475 from $450. The analyst notes that he has generally been positive on the stock, but valuation has often kept him on the sidelines. With the equity now trading at an 18.0 times PE multiple and the company growing 2019 EPS an estimated 17%-plus year over year, East believes investors appreciate the potential risks, but might not be appreciating the potential upside. Although immediate RM deflation benefits in Q4 are likely pre-mature, given the equity's nearly 20% pullback from September 2018, the analyst believes any inline, to slightly better than expected, results over the next year will be "inordinately rewarded."