10 Best Basic Materials Stocks To Buy Now

2. Sherwin-Williams Co. (NYSE:SHW)

Number of Hedge Fund Holders: 76

In the US, Sherwin-Williams Co. (NYSE:SHW) is the biggest supplier of architectural paint. The company sells high-quality paint at higher price points than most of its competitors and has over 5,000 outlets. The firm also sells its products in big-box stores and provides coatings for original equipment manufacturers. Over 74% of Sherwin’s business is conducted in North America, and the company gained a significant amount of worldwide exposure when it bought Valspar in 2016. Its formerly meager retail presence has been strengthened by the acquisition of Valspar, as Sherwin was granted an exclusive agreement in 2018 as a result of Valspar’s long-standing relationship with Lowe’s. In addition, Sherwin acquired Valspar’s industrial division, growing its performance coatings business.

In a more comprehensive research note on U.S. Chemicals, BMO Capital increased its price objective for Sherwin-Williams from $400 to $425 and maintained its Outperform rating for the company’s shares. The analyst informs that while there were pockets of incremental weakening, namely in Europe and China, the firm’s channel checks point to a small number of end markets and commodities that enjoyed relative strength. While demand in the Paint Stores Group is still lumpy due to challenges from rising mortgage rates, share gains from prior investments and a more comprehensive level of pricing in the quarter should support growth, according to BMO.

Evercore ISI maintained its Outperform rating on the shares and increased the company’s price target for Sherwin-Williams Co. (NYSE:SHW) from $365 to $380. Investors are informed that Sherwin’s first analyst day with CEO Heidi Petz “reinforced the customer service and winning culture which defines the company.” The firm claims that the new medium-term targets “suggest plenty of upside” to the Street’s $12.85 EPS estimate for 2025 when volume shifts, despite the fact that no changes were given regarding 2024.

SHWs products have been preferred by professional painters for many years, which has resulted in strong brand loyalty and price power.

E. Shaw’s D E Shaw is the largest stakeholder in the company from among the funds in Insider Monkey’s database. It owns 1,524,367 shares worth $454.92 million as of Q2.