SHW - Sherwin-Williams: An Underweight Bucket Of Paint

• The Sherwin-Williams Company has delivered strong returns and dividend payouts for numerous years.
• As a global leader in the paint and coatings market, the company's size, scale, and brand awareness are significant competitive advantages against related peers.
• Over the past two years, shares have appreciated to record levels. While a pullback did occur, the current valuation still appears high.
• In order to support its current level, revenues must grow at double-digit rates for the foreseeable future, which is unlikely.
• An underweight allocation is justified given the elevated risk of downside ahead of earnings.

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