The analysts might have been a bit too bullish on The Sherwin-Williams Company (NYSE:SHW), given that the company fell short of expectations when it released its quarterly results last week. Results look to have been somewhat negative - revenue fell 2.4% short of analyst estimates at US$5.4b, and statutory earnings of US$1.97 per share missed forecasts by 5.8%. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

See our latest analysis for Sherwin-Williams  earnings-and-revenue-growth

Taking into account the latest results, the consensus forecast from Sherwin-Williams' 26 analysts is for revenues of US$23.7b in 2024. This reflects a satisfactory 3.0% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 12% to US$10.61. Before this earnings report, the analysts had been forecasting revenues of US$23.8b and earnings per share (EPS) of US$10.70 in 2024. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$337. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Sherwin-Williams, with the most bullish analyst valuing it at US$400 and the most bearish at US$219 per share. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Sherwin-Williams' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 4.0% growth on an annualised basis. This is compared to a historical growth rate of 6.6% over the past five years. Compare this to the 128 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 4.3% per year. So it's pretty clear that, while Sherwin-Williams' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.



The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. The consensus price target held steady at US$337, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have forecasts for Sherwin-Williams going out to 2026, and you can see them free on our platform here.

We don't want to rain on the parade too much, but we did also find 1 warning sign for Sherwin-Williams that you need to be mindful of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.