BMO Capital analysts reaffirmed an Outperform rating with a target price of $340.00 for Sherwin-Williams (NYSE:SHW). The analysts’ comments come in the wake of Kelly-Moore (KM), a significant private paint store and architectural coatings company based on the West Coast, declaring Chapter 11 bankruptcy and ceasing operations immediately. This development is seen as an advantageous opportunity for Sherwin-Williams to capture immediate business gains in the short term.
In the longer term, the analysts anticipate that Sherwin-Williams will likely enhance its store density to secure a larger share of the West Coast contractor and professional market. The bankruptcy of Kelly-Moore is viewed positively for Sherwin-Williams as it removes a major regional competitor. Sherwin-Williams’ market share in the Kelly-Moore territory was not as strong as in other parts of the U.S., given Kelly-Moore’s long-standing regional presence and considerable brand loyalty. Consequently, this situation presents Sherwin-Williams with both short-term and long-term growth opportunities.