NEW YORK (Reuters) – Shares of paint maker Sherwin-Williams Co (SHW.N) have fallen just 1 percent in the past 12 months, while those of homebuilders, wallboard makers and carpet makers have tumbled, making the company’s shares ripe for a sell-off, Barron’s said.
The paint company has seen a sharp drop in sales of its pricier brands, such as Sherwin-Williams, Dutch Boy and Pratt and Lambert, Barron’s said in its April 13 edition.
Shares are trading at about 15 times Wall Street’s average estimate of 2009 earnings estimate of $3.54, while peers such as PPG Industries Inc (PPG.N) and RPM International Inc(RPM.N), trade at around 12, Barron’s said.
Michael Souers, Standard and Poor’s analyst, has a “sell” rating on the stock and a 12-month share price target of $44. He sees several more quarters at risk from a macro-economic standpoint and no strong catalysts to drive up shares, Barron’s said.
Still, other analysts believe in the company’s prospects, including KeyBanc analyst Saul Ludwig, who has a “buy” rating and a price target of $63 a share, Barron’s said. Buckingham Research analyst John Roberts has set his price target at $60 a share based on a belief that the housing and construction sectors are near a bottom, according to the report.
Sherwin-Williams shares closed at $53.55 on Thursday on the New York Stock Exchange before the Good Friday holiday.
(Reporting by Ilaina Jonas, Additional reporting by Michael Erman; Editing by Bernard Orr and Leslie Adler)