Sherwin-Williams Company (SHW) AI Stock Analysis

• Market Cap: $90.13B
• Dividend Yield: 0.82%
• Average Volume (3M): 1.98M
• Price to Earnings (P/E): 34.0
• Beta (1Y): 0.90
• Revenue Growth: 0.26%
• EPS Growth: 12.82%
• Country: US
• Employees: 63,890
• Sector: Basic Materials
• Sector Strength: 61
• Industry: Chemicals - Specialty
• EPS (TTM): 2.25
• Shares Outstanding: 250,600,590
• 10 Day Avg. Volume: 1,623,060
• 30 Day Avg. Volume: 1,980,195
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.00
• Price to Cash Flow (P/CF): 0.00
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: 1.12
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: 9.00
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $402.27
• Price Target Upside: 11.80% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 13

Sherwin-Williams demonstrates strong financial health and effective cash flow management, supporting a robust overall performance in the Chemicals - Specialty industry. The company faces some technical challenges with mixed indicators and a high P/E ratio, suggesting potential overvaluation. Positive earnings call insights and strategic initiatives like the Suvinil acquisition indicate confidence in future growth, despite existing market challenges.

Positive Factors

Earnings

SHW posted a solid 1Q beat despite tough 1Q weather and slow US housing market.

Market Performance

Growing tailwinds from raw material deflation and a more resilient housing market suggest SHW will outperform the market.

Profitability

Profitability came in better than expected despite lighter sales.

Negative Factors

Market Demand

The company is experiencing strong earnings growth driven by share gains and positive pricing momentum despite weak demand.

Tariff Impact

Tariff impacts on SHW are likely limited to cost inflation pressure, as the majority of revenue comes from the US.

Sherwin-Williams Company Business Overview & Revenue Model

Company Description

The Sherwin-Williams Company develops, manufactures, distributes, and sells paints, coatings, and related products to professional, industrial, commercial, and retail customers. It operates through three segments: The Americas Group, Consumer Brands Group, and Performance Coatings Group. The Americas Group segment offers architectural paints and coatings, and protective and marine products, as well as OEM product finishes and related products for architectural and industrial paint contractors, and do-it-yourself homeowners. The Consumer Brands Group segment supplies a portfolio of branded and private-label architectural paints, stains, varnishes, industrial products, wood finishes products, wood preservatives, applicators, corrosion inhibitors, aerosols, caulks, and adhesives to retailers and distributors. The Performance Coatings Group segment develops and sells industrial coatings for wood finishing and general industrial applications, automotive refinish products, protective and marine coatings, coil coatings, packaging coatings, and performance-based resins and colorants. It serves retailers, dealers, jobbers, licensees, and other third-party distributors through its branches and direct sales staff, as well as through outside sales representatives. The company has operations primarily in the North and South America, the Caribbean, Europe, Asia, and Australia. As of February 17, 2022, it operated approximately 5,000 company-operated stores and facilities. The Sherwin-Williams Company was founded in 1866 and is headquartered in Cleveland, Ohio.

How the Company Makes Money

Sherwin-Williams generates revenue through the sale of its diverse range of paint and coating products. The Americas Group, the largest segment, primarily sells architectural paints and coatings through company-operated stores in the U.S., Canada, and Latin America. The Consumer Brands Group markets branded and private-label products primarily through retailers, including home centers, mass merchandisers, and independent paint dealers. The Performance Coatings Group provides a broad range of industrial coatings and finishing solutions to OEMs, refinishers, and other commercial sectors globally. Key revenue streams include direct sales through its extensive network of stores and online platforms, licensing agreements, and strategic partnerships with retailers and distributors. The company also benefits from its strong brand recognition and innovation in product development to maintain competitive advantage and market presence.

Sherwin-Williams Company Financial Statement Overview

Summary

Sherwin-Williams Company exhibits strong financial health with consistent profitability and effective cash flow management. While high leverage presents a potential risk, the company's ability to generate substantial earnings and cash flow helps mitigate this concern. The combination of stable revenue growth, strong profitability, and efficient cash management positions the company well in the Chemicals - Specialty industry.

Income Statement

The Sherwin-Williams Company's income statement shows strong profitability with a consistent gross profit margin of around 48% and a net profit margin near 12%. The revenue growth rate is modest but stable, indicating a solid market position. EBIT and EBITDA margins are also healthy, reflecting efficient cost management. Overall, the income statement reflects a profitable and stable financial performance.

Balance Sheet

The balance sheet indicates a high debt-to-equity ratio, suggesting significant leverage which could pose a risk if earnings fluctuate. However, the return on equity is strong at approximately 65%, showcasing efficient use of equity capital to generate profits. The equity ratio of around 17% highlights a relatively lower reliance on equity financing, typical for the industry, but warrants cautious monitoring of debt levels.

Cash Flow

Sherwin-Williams demonstrates strong cash flow management with a positive free cash flow and a solid operating cash flow to net income ratio above 1. The free cash flow growth rate shows some volatility, but overall cash generation remains robust, supporting ongoing business operations and potential debt servicing.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
23.10B	23.05B	22.15B	19.94B	18.36B
	Gross Profit
11.20B	10.76B	9.33B	8.54B	8.68B
	EBIT
3.77B	3.52B	2.98B	2.58B	2.86B
	EBITDA
3.77B	4.15B	3.97B	3.57B	3.87B
	Net Income Common Stockholders
2.68B	2.39B	2.02B	1.86B	2.03B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
210.40M	276.80M	198.80M	165.70M	226.60M
	Total Assets
23.63B	22.95B	22.59B	20.67B	20.40B
	Total Debt
11.91B	11.81B	12.51B	11.50B	10.11B
	Net Debt
11.70B	11.53B	12.31B	11.33B	9.89B
	Total Liabilities
19.58B	19.24B	19.49B	18.23B	16.79B
	Stockholders Equity
4.05B	3.72B	3.10B	2.44B	3.61B
Cash Flow		Free Cash Flow
2.08B	2.63B	1.28B	1.87B	3.10B
	Operating Cash Flow
3.15B	3.52B	1.92B	2.24B	3.41B
	Investing Cash Flow
-1.20B	-1.04B	-1.61B	-476.40M	-322.40M
	Financing Cash Flow
-2.02B	-2.42B	-282.40M	-1.83B	-3.02B

Sherwin-Williams Company Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 359.82
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHW, the sentiment is Positive. The current price of 359.82 is above the 20-day moving average (MA) of 336.99, above the 50-day MA of 343.51, and above the 200-day MA of 357.55, indicating a bullish trend. The MACD of 3.61 indicates Negative momentum. The RSI at 62.92 is Neutral, neither overbought nor oversold. The STOCH value of 90.16 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SHW.

Sherwin-Williams Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SHW	78 Outperform	$90.13B	34.03	70.22%	0.82%	0.26%	12.82%
AXTA	75 Outperform	$7.25B	18.67	21.49%	―	1.77%	47.48%
RPM	69 Neutral	$14.17B	22.09	25.53%	1.80%	-0.61%	15.06%
EMN	68 Neutral	$9.00B	9.92	16.16%	4.21%	2.78%	1.50%
DD	63 Neutral	$28.14B	40.24	0.06%	2.30%	4.51%	-121.68%
PPG	62 Neutral	$25.08B	18.72	18.47%	2.43%	-7.67%	-0.58%
Sector *	49 Neutral	$1.95B	-1.32	-21.23%	3.72%	0.87%	-29.37%

Sherwin-Williams Company Corporate Events

Sherwin-Williams Approves New Compensation Plan and Amendments

On April 16, 2025, Sherwin-Williams held its Annual Meeting of Shareholders, where the 2025 Equity and Incentive Compensation Plan was approved, authorizing 21,969,555 shares for issuance. This plan includes various performance-based awards and limits non-employee director compensation to $750,000 annually. Additionally, shareholders approved amendments to the company’s Charter to eliminate supermajority voting requirements, reducing the required vote for certain matters to a simple majority. These changes, effective April 17, 2025, aim to streamline decision-making processes and enhance shareholder engagement.

Spark’s Take on SHW Stock

According to Spark, TipRanks’ AI Analyst, SHW is a Outperform.

Sherwin-Williams demonstrates solid financial performance with strong revenue growth and profitability. However, high leverage and declining cash flow present risks. The technical indicators suggest a bearish trend, and the valuation appears high. Despite these challenges, the company’s strategic initiatives and past earnings growth provide some optimism.

To see Spark’s full report on SHW stock, click here.