Paint giant Sherwin-Williams and homebuilder PulteGroup beat quarterly earnings estimates early Tuesday but their stocks diverge. PulteGroup retreated to test a buy point. Meanwhile, Sherwin-Williams stock spiked toward a buy point.
Homebuilders as well as stocks from the broader housing and construction sector have revved up in the past couple of weeks on growing expectations of Fed rate cuts, bringing Treasury yields to four-month lows.
PulteGroup
PulteGroup on Tuesday reported a 19% increase in earnings to a record $3.83 per share, clearing FactSet estimates for $3.27 per share. Revenue rose 9.8% to nearly $4.6 billion, while analysts expected $4.49 billion in revenue.
Home sale revenues increased 10% to $4.4 billion while Q2 closings rose 8% from last year. Pulte also reported a 2% increase in the average prices of homes sold.
However, net new home orders declined 4% due to higher interest rates affecting affordability.
PHM stock closed a fraction higher Tuesday to pare an early retreat. Shares closed in a buy zone for a consolidation, above a 122.72 buy point.
PulteGroup stock leapt 21.7% this year through Tuesday's close.
Sherwin-Williams
Sherwin-Williams reported a 12.5% earnings increase to $3.70 per share adjusted, which beat expectations for $3.49 per share. Net sales ticked up 0.5% to $6.27 billion, but fell short of FactSet forecasts of $6.33 billion.
Sherwin-Williams noted higher sales volumes in its paint stores and performance coatings groups, partially offset by lower sales volumes for its consumer brands group. The decline in consumer brand sales was primarily driven by softer DIY demand in North America.
SHW stock leapt 6.9% to 344.50 Tuesday.
Shares are working up the right side of a cup base toward a 348.37 buy point.
Sherwin-Williams climbed 10.5% in 2024.
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