UBS has adopted a more cautious stance on Sherwin-Williams, revising its stock rating from "buy" to "neutral".

In a report issued on Monday, analyst Joshua Spector noted that while the paint company's earnings are significantly linked to a recovery in the U.S. housing market, the timeline for that market rebound has been pushed back.

He wrote, "We now forecast Sherwin-Williams' earnings to grow at a compound annual rate of approximately 5% over the next two years, and we do not anticipate above-average growth until after 2028. The stock merits a premium relative to its paint industry peers due to its pricing power, but shifts in product mix and potentially higher leverage from acquisitions could act as headwinds, posing a risk of near-term valuation contraction."

In early trading, Sherwin-Williams shares fell nearly 1%, touching a new 52-week low.