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Sherwin-Williams Company (SHW)
NYSE:SHW
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Sherwin-Williams Company
(NYSE:SHW)
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Rating:67Neutral
Price Target:
$388.00
▲(7.01% Upside)
Action:DowngradedDate:02/20/26
The score is driven mainly by strong profitability and cash generation, tempered by high balance-sheet leverage. Technicals are steady but not strongly bullish, while valuation (high P/E and low yield) limits upside. Earnings-call guidance is constructive but cautious due to persistent demand softness and cost/interest headwinds.
Positive Factors
Margin Expansion and Profitability
Sustained margin expansion reflects durable pricing power and cost discipline. Improving adjusted EBITDA margin and historical gross-margin gains provide structural earnings resilience even with modest top-line growth, supporting cash generation and capacity for reinvestment and returns.
Strong Cash Generation
Consistent high operating and free cash flow gives Sherwin-Williams durable financial flexibility to service debt, fund capex, pursue M&A, and return capital. Strong FCF conversion supports buybacks and dividends while providing a buffer against cyclical revenue softness.
Strategic Store Expansion & M&A
Adding retail footprint and the Suvenil acquisition strengthen distribution and regional exposure, deepening professional and Consumer Brands reach. Physical expansion plus targeted M&A build durable market share advantages and growth optionality in Americas and LatAm.
Negative Factors
High Leverage
Elevated leverage materially reduces financial flexibility and amplifies downside risk in a downturn. Interest-cost sensitivity and refinancing needs constrain strategic optionality, and high debt magnifies earnings volatility if volumes or margins deteriorate.
Softer-for-Longer Demand
Persistent weakness across DIY, residential and industrial end markets limits sustainable revenue growth. Structural demand softness pressures volumes, limits pricing realization, and raises the risk that margin gains must offset prolonged top-line stagnation.
Raw-Material and Tariff Headwinds
Rising input costs and tariff exposure create structural margin pressure that requires persistent pricing, mix shifts, or further simplification to offset. With competitive realization delays and volume sensitivity, cost inflation could erode operating profitability.
Sherwin-Williams Company (SHW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$89.84B
Dividend Yield0.98%
Average Volume (3M)1.74M
Price to Earnings (P/E)35.3
Beta (1Y)0.69
Revenue Growth0.96%
EPS Growth1.96%
CountryUS
Employees63,890
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)2.23
Shares Outstanding247,774,770
10 Day Avg. Volume1,414,713
30 Day Avg. Volume1,741,228
Financial Highlights & Ratios
PEG Ratio-11.07
Price to Book (P/B)17.36
Price to Sales (P/S)3.39
P/FCF Ratio30.08
Enterprise Value/Market Cap1.16
Enterprise Value/Revenue4.42
Enterprise Value/Gross Profit9.03
Enterprise Value/Ebitda23.73
Forecast
1Y Price Target
$396.91Price Target Upside9.47% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
EPS Forecast (FY)11.97
Revenue Forecast (FY)$24.56B
Sherwin-Williams Company Business Overview & Revenue Model
Company DescriptionThe 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 MoneySherwin-Williams generates revenue primarily through the sale of its paint and coatings products across its various business segments. The key revenue streams include retail sales through company-owned stores and independent dealers, as well as sales to professional contractors, industrial clients, and original equipment manufacturers (OEMs). The company also benefits from significant partnerships with home improvement retailers, allowing it to reach a broader customer base. Additionally, Sherwin-Williams engages in strategic acquisitions to expand its product offerings and market presence, further enhancing its earnings potential. The company's focus on innovation and sustainability in its product development also contributes to its competitive advantage and revenue growth.
Sherwin-Williams Company Key Performance Indicators (KPIs)
Any
Revenue by Segment
Shows revenue generated by each business segment, indicating where the company is experiencing growth and where it might face challenges.
Shows revenue generated by each business segment, indicating where the company is experiencing growth and where it might face challenges.
Data provided by:
The Fly
The FlySherwin-Williams Company Earnings Call Summary
Earnings Call Date:Jan 29, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 2026
Earnings Call Sentiment Positive
The company reported solid financial performance and record results for 2025 (sales, adjusted EPS, expanded EBITDA margin, strong cash generation and disciplined SG&A control) while navigating a persistent weak demand environment. Management provided realistic, slightly growth-oriented guidance for 2026 (low- to mid-single-digit sales growth and modest adjusted EPS growth) and highlighted cost control, pricing actions, store expansion and strategic integration of Suvenil as levers to offset raw material, tariff and interest-cost headwinds. The call balanced tangible operational and financial achievements against significant macro and commodity challenges that are expected to persist into 2026.Q4-2025 Updates
Positive Updates
Record Full-Year Sales and EPS
Company delivered record full-year consolidated sales and record adjusted diluted net income per share (2025 adjusted diluted EPS $11.43). Full-year adjusted diluted EPS growth guidance midpoint of $11.70 implies +2.4% versus 2025 (excluding acquisition amortization).
Quarterly Profitability and Margin Expansion
In Q4 adjusted EBITDA grew 13.4% year-over-year and adjusted EBITDA margin expanded 120 basis points to 17.7% of sales. Adjusted diluted net income per share in the quarter increased 6.7%.
Strong Cash Generation and Capital Returns
Full-year net operating cash grew 9.4% to $3.5 billion (14.6% of sales). Free cash flow was $2.7 billion with full-year free cash flow conversion of 59%; Q4 free cash flow conversion was 90.1%. Returned $2.5 billion to shareholders via buybacks and dividends and raised the dividend for the 47th consecutive year.
Paint Stores Group Resilient with Margin Improvement
Paint Stores Group sales increased in expected range in Q4; protective & marine grew high single digits and residential repaint grew just below mid-single digits versus a tough comp. Segment margin expanded 90 basis points to 20.8% in Q4; positive price/mix contributed in low single digits.
Performance Coatings Strong Execution
Performance Coatings Group sales were at the high end of expectations in Q4. Adjusted segment margin improved 150 basis points to 19%, driven by new business wins and SG&A control (SG&A down mid-single digits in the quarter). Packaging grew at the high end of high single digits for the year.
Successful Integration Start and Strategic Acquisition
Completed acquisition of Suvenil and delivered the first full quarter including the business; Consumer Brands sales from acquisition and FX contributed to Q4 upside and Suvenil is expected to be a strategic growth asset in Brazil/LatAm.
Administrative Cost Discipline
Administrative SG&A decreased low single digits in Q4 including one-time restructuring (~$2 million). Excluding restructuring and non-annualized new building operating costs, administrative SG&A declined low teens, improving sequentially versus Q3.
Practical, Positive 2026 Guidance
Initial 2026 guidance: consolidated sales up low- to mid-single-digit; GAAP diluted net income per share $10.70–$11.10; adjusted diluted EPS $11.50–$11.90 (excl acquisition amortization $0.80). Company expects to remain within target net debt/adjusted EBITDA leverage (2.0–2.5x) and plans 80–100 net new stores.
Negative Updates
Softer-for-Longer Demand Backdrop
Management reiterated no meaningful recovery across end markets and expects the 'softer for longer' demand dynamic to persist well into 2026, limiting top-line tailwinds and keeping the outlook cautious.
Consumer Brands Underlying Weakness
Full-year underlying Consumer Brands sales (ex-Suvenil) declined low single digits due to soft North American DIY demand and unfavorable FX. Adjusted segment margin decreased including negative Suvenil-related impacts and lower production causing weaker fixed cost absorption.
Industrial End-Market Pressure
Performance Coatings full-year sales were flat overall as challenging industrial demand persisted; coil sales decreased low single digits (steel tariff impacts) and industrial wood & general industrial each declined low single digits.
Raw Material and Tariff Headwinds
Company expects the raw material basket to be up a low single-digit percentage in 2026 driven by tariffs and select commodity inflation, creating margin pressure that must be offset by pricing and simplification efforts.
Rising Interest Expense and Financing Costs
Interest expense will increase in 2026 (approx. $40M lease payments for new HQ, ~$35M related to $1.1B delayed draw term loan, and ~$15M from refinancing), placing upward pressure on GAAP SG&A and net interest costs.
Acquisition-Related Dilution and Integration Costs
Suvenil caused dilutive impacts in the quarter and full year from transaction closing costs and purchase accounting items; management expects integration costs and margin noise until the acquisition is fully annualized in 3Q 2026.
Residential and New Construction Headwinds
New residential market expected to be down at least mid-single digits in 2026 given negative single-family starts and affordability headwinds; mortgage rate lock-in and muted consumer sentiment constrain DIY and new residential demand.
Volumes Pressured Despite Price Actions
In Q4 overall volumes were down low single digits in Paint Stores Group even as price/mix was positive low single digits; company expects realization of a Jan 1 7% Stores price increase to be low-single-digit, reflecting competitive/jump-ball dynamics that may delay full realization.
Company Guidance
Management guided 2026 consolidated sales to increase a low- to mid-single-digit percentage and GAAP diluted net income per share to $10.70–$11.10 (adjusted diluted EPS, excluding $0.80 of acquisition‑related amortization, $11.50–$11.90; midpoint $11.70, +2.4% vs. 2025 adjusted EPS of $11.43). They expect Paint Stores Jan. 1 pricing of 7% with realization in the low single digits, a raw‑material basket up a low single‑digit percentage, GAAP SG&A dollars up a low single digit (including a low‑single‑digit contribution from Suvenil), and roughly $90M of incremental interest expense (≈$40M HQ lease, $35M delayed‑draw term loan, $15M refinancing). The company expects full‑year gross‑margin expansion, plans to open 80–100 net new U.S./Canada stores, will continue opportunistic buybacks, is proposing a 1.3% dividend raise to $3.20, and expects to end 2026 within its 2.0–2.5x net debt/adjusted‑EBITDA target; for context FY2025 net operating cash rose 9.4% to $3.5B (14.6% of sales), free cash flow was $2.7B (59% conversion) and Q4 FCF conversion was 90.1%.Sherwin-Williams Company Financial Statement Overview
Summary
Strong profitability (meaningful gross-margin improvement and healthy net margin) and solid free cash flow generation support the score. However, the balance sheet is a key constraint with high leverage (debt ~3.2x equity) and only modest recent revenue growth, increasing downside risk if demand weakens.Income Statement
Revenue has expanded over the period (2020 to 2025), with a solid step-up in profitability versus the low point in 2022. Gross margin improved meaningfully (about 42% in 2022 to ~49% in 2025), supporting stronger operating profitability. Net margin remains healthy (~11% in 2025), though it eased from 2024 as earnings fell despite slightly higher sales, indicating some cost pressure/mix headwinds. Recent top-line growth is modest (nearly flat in 2024; low-single-digit in 2025), which caps the score despite strong margins.78
Positive
Balance Sheet
The balance sheet is the main constraint: leverage is high, with debt running at roughly 3.2x equity in 2025 (and elevated through most years). Debt increased in 2025 while equity improved, leaving leverage still above typical comfort levels. Returns on equity are very strong (well above 50% in recent years), but that strength is amplified by leverage and comparatively low equity, which increases financial risk if operating conditions soften.55
Neutral
Cash Flow
Cash generation is solid: operating cash flow was ~$3.45B in 2025 and free cash flow was ~$2.65B, up strongly year over year. Free cash flow conversion is decent (about 77% of net income in 2025), supporting flexibility for debt service and shareholder returns. The key weakness is that operating cash flow covers only about half of EBIT in 2025 (and has generally been below 1x), suggesting working-capital or cash-tax drag and somewhat less cash efficiency versus reported operating profit.72
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 23.57B | 23.10B | 23.05B | 22.15B | 19.94B |
| Gross Profit | 11.54B | 11.20B | 10.76B | 9.33B | 8.54B |
| EBITDA | 4.40B | 4.49B | 4.15B | 3.54B | 3.16B |
| Net Income | 2.57B | 2.68B | 2.39B | 2.02B | 1.86B |
Balance Sheet | |||||
| Total Assets | 25.90B | 23.63B | 22.95B | 22.59B | 20.67B |
| Cash, Cash Equivalents and Short-Term Investments | 207.20M | 210.40M | 276.80M | 198.80M | 165.70M |
| Total Debt | 14.53B | 11.91B | 11.81B | 12.51B | 11.50B |
| Total Liabilities | 21.30B | 19.58B | 19.24B | 19.49B | 18.23B |
| Stockholders Equity | 4.60B | 4.05B | 3.72B | 3.10B | 2.44B |
Cash Flow | |||||
| Free Cash Flow | 2.65B | 2.08B | 2.63B | 1.28B | 1.87B |
| Operating Cash Flow | 3.45B | 3.15B | 3.52B | 1.92B | 2.24B |
| Investing Cash Flow | -2.01B | -1.20B | -1.04B | -1.61B | -476.40M |
| Financing Cash Flow | -1.38B | -2.02B | -2.42B | -282.40M | -1.83B |
Sherwin-Williams Company Technical Analysis
Positive
362.59
Price Trends
348.85
Positive
342.20
Positive
346.40
Positive
Market Momentum
3.08
Positive
54.04
Neutral
28.62
Neutral
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 362.59 is below the 20-day moving average (MA) of 362.88, above the 50-day MA of 348.85, and above the 200-day MA of 346.40, indicating a neutral trend. The MACD of 3.08 indicates Positive momentum. The RSI at 54.04 is Neutral, neither overbought nor oversold. The STOCH value of 28.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SHW.
Sherwin-Williams Company Risk Analysis
Sherwin-Williams Company disclosed 22 risk factors in its most recent earnings report. Sherwin-Williams Company reported the most risks in the "Macro & Political" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Sherwin-Williams Company Peers Comparison
UnderperformOutperform
Sector (61)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $86.95B | 42.37 | 22.40% | 1.01% | 1.38% | -2.54% | |
71 Outperform | $14.62B | 21.98 | 22.72% | 1.96% | 3.09% | 12.25% | |
68 Neutral | $27.55B | 17.82 | 21.34% | 2.71% | -12.98% | -11.34% | |
67 Neutral | $89.84B | 35.35 | 59.39% | 0.98% | 0.96% | 1.96% | |
65 Neutral | $7.13B | 19.20 | 17.75% | ― | -1.83% | 40.64% | |
65 Neutral | $20.46B | ― | -0.80% | 1.74% | 2.42% | -196.54% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% |
* Basic Materials Sector Average
SHW
Sherwin-Williams Company
362.59
8.24
2.32%
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DD
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Sherwin-Williams Company Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Sherwin-Williams Extends Credit Facility, Strengthens Liquidity Position
Positive
Feb 9, 2026
On February 9, 2026, Sherwin-Williams amended its Amended and Restated Credit Agreement with Citicorp USA, Inc. and a syndicate of lenders to extend the maturity of $75 million in available commitments and letter-of-credit capacity from June 20, 2026 to December 20, 2030. The extension secures longer-term access to liquidity and banking support, underscoring the company’s established relationships with commercial and investment banks that provide a range of financial services to Sherwin-Williams and its subsidiaries.
The most recent analyst rating on (SHW) stock is a Buy with a $385.00 price target. To see the full list of analyst forecasts on Sherwin-Williams Company stock, see the SHW Stock Forecast page.
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.