Sherwin-Williams (SHW) appears "well-positioned" to deliver volume growth at 1.5 to two times the overall market's growth rate, in light of its exclusive share gains from struggling peers, RBC Capital Markets said in a note emailed Friday.
The volume growth is primarily fueled by market share gains and superior distribution compared with competitors, leading Sherwin-Williams to be "among the strongest company-owned coatings channel in the US," RBC analysts said.
The firm added that artificial intelligence infrastructure is a key growth driver, with data centers and their related facilities needing to be painted and maintained. This creates potential lucrative recurring maintenance revenue opportunities for the company, according to the note.
The company can reach over 10% EPS growth in fiscal 2027 if it is able to deliver on anticipated revenue growth from share gains, AI infra and price, among other expectations, the analysts said.
RBC maintained the company's stock rating at outperform and price target at $420.
Price: 322.88, Change: +2.48, Percent Change: +0.77
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