Sherwin-Williams shares fall after downgrade

Goldman Sachs analyst Amy Zhang downgraded the Cleveland-based company from "Neutral" to "Sell" on Sunday evening, saying the company's shares are trading "at an unwarranted premium."

Shares fell $3.67, or 6.8 percent to $50.45 before falling another 7 percent in after-hours trading Monday.

"Although the company's long-term growth potential remains intact, we are cautious that the cost and demand headwinds will continue challenging (Sherwin-Williams) in the near term," Zhang wrote in a note to investors.

She said further deterioration of home sales, rising raw-materials costs and a "substantially tighter credit condition" would all likely to hamper the company and limit any benefit Sherwin-Williams could get out of price hikes.

Last week, Sherwin-Williams posted a better-than-expected second quarter, despite high material costs that crimped profit.

The company cautioned investors that it would be forced to raise prices for a third time this year, and predicted the still-souring housing sector will hamper its third-quarter results