Sherwin-Williams downgraded at Citi as coatings companies face challenges

|By:, SA News Editor

Sherwin-Williams (SHW -1.9%) is downgraded to Neutral from Buy with a $435 price target, cut from $492, at Citigroup, which cites "tough" market comments from companies Such as PPG Industries (PPG +0.9%), H.B. Fuller (FUL -3.2%) and RPM International (RPM +1.1%) suggest coatings companies likely will be hurt by rising raw materials costs and slowing growth in key end markets including China.

Citi's P.J. Juvekar says SHW is not immune to the risks despite the company's strong U.S. stores business, especially with Valspar's more cyclical industrial business and acquisition-related debt.

PPG plunged 10% yesterday after issuing disappointing Q3 guidance on earnings and revenue, citing inflationary pressures and weaker demand in China.

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