Valspar Shares Popped: What You Need to Know

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Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of paint and coatings specialist Valspar (NYS: VAL) climbed 10% on Tuesday after its quarterly results and full-year guidance topped Wall Street expectations.

So what: Valspar's fourth-quarter beat was so wide -- adjusted EPS of $0.84 thumped the consensus of $0.70 -- that analysts have no choice but to raise their short-term price targets. 2011 also marked the 33rd consecutive year in which the company raised its dividend, suggesting that it remains a stable long-term income opportunity, as well. 

Now what: Management now sees 2012 adjusted earnings of $2.87-$3.07, which is also well above the average analyst estimate of $2.81. "While the outlook for the global economy is unclear, our sales will benefit from our diverse mix of businesses and growth in fast-growing coatings markets in Asia and Latin America," CEO Gary Hendrickson said. More importantly, with Valspar trading at a slight forward P/E discount (using the midpoint of its 2012 guidance) to rivals RPM International (NYS: RPM) and Sherwin-Williams (NYS: SHW) , there's still time to buy into that optimism.

Interested in more info onValspar?Add it to your watchlist.

At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Sherwin-Williams. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.

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