The Valspar Corporation (
VAL), based in Minneapolis, is the sixth largest paint and coatings manufacturer in the world. It has manufacturing operations all over the world including U.S., Europe, and Asia. It makes coatings for the global industrial, packaging and architectural markets.
Improved pricing and product mix, along with the positive benefits from the restructuring activity and acquisitions, are helping Valspar to realize sales gains. Presently, the company's fastest growing markets are China, Latin America and Eastern Europe.
The management is currently using Lean Six Sigma to drive productivity in the corporation. However, a slumping housing market slowed demand for architectural and wood coating products. Moreover, higher raw material costs are eroding margins for the company.
These prompt us to rate the stock a Hold with a six-month target price of $18.50.
