Sherwin-Williams (ticker: SHW) has experienced a somewhat stagnant year in 2023. However, outgoing Chairman and CEO, John G. Morikis, showed confidence in the company by purchasing a significant number of shares following the release of strong earnings.
Impressive Third-Quarter Performance
On the morning of October 24, Sherwin-Williams reported third-quarter earnings and sales that surpassed Wall Street's expectations. The company also raised its guidance, although it acknowledged the continued pressures faced by North American do-it-yourself customers. Morikis expressed optimism, stating, "We continue to see opportunity amid uncertainty," in the earnings release.
CEO's Show of Confidence
The day after the earnings announcement, Morikis acquired 2,125 Sherwin-Williams shares, spending a total of $505,000 at an average price of $237.60 per share. According to a form filed with the Securities and Exchange Commission, Morikis currently holds 317,270 shares in a personal account, 57,373 shares through the company's 401(k) plan, and another 48,695 shares through a trust.
Focus on the Future
Despite repeated requests, Sherwin-Williams did not provide a comment from Morikis regarding his recent purchase. It is worth noting that Morikis last bought stock on the open market in January, when he spent $500,325 to acquire 2,207 shares at an average price of $226.70 per share.
New Leadership Transition
Sherwin-Williams is undergoing a leadership transition, with President and Chief Operating Officer Heidi Petz set to take over as CEO on January 1. Morikis will assume the role of executive chairman. Analyst Michael J. Harrison from Seaport Research Partners believes that Petz's fresh perspective as a non-Sherwin-Williams veteran could introduce new insights. Harrison rates Sherwin-Williams stock as a Buy, with a $305 price target.
