tiprankstipranks
Trending News
More News >
Sherwin-Williams (SHW)
:SHW
Advertisement

Sherwin-Williams Company (SHW) AI Stock Analysis

Compare
1,946 Followers

Top Page

SHW

Sherwin-Williams Company

(NYSE:SHW)

Select Model
Select Model
Select Model
Neutral 70 (OpenAI - 4o)
Rating:70Neutral
Price Target:
$388.00
▲(13.71% Upside)
Sherwin-Williams' strong financial performance and robust cash flow generation are significant strengths, providing a solid foundation despite high leverage. The technical analysis suggests a neutral trend with potential oversold conditions. Valuation metrics indicate possible overvaluation, and the earnings call revealed challenges in demand and supply chain inefficiencies, leading to reduced earnings guidance. These factors collectively result in a moderate overall stock score.
Positive Factors
Strong Cash Flow Generation
The company's ability to generate strong cash flow supports its financial stability and provides a buffer against economic uncertainties, ensuring it can fund operations and invest in growth initiatives.
Gross Margin Expansion
Consistent gross margin expansion indicates effective pricing strategies and cost management, enhancing profitability and providing a competitive edge in the market.
Market Share Gains
Gaining market share in key segments like residential repainting strengthens Sherwin-Williams' competitive position, supporting long-term revenue growth and brand dominance.
Negative Factors
High Leverage
High leverage poses financial risks, potentially limiting the company's ability to invest in growth or weather economic downturns, impacting long-term financial health.
Supply Chain Inefficiencies
Supply chain inefficiencies can disrupt operations and increase costs, affecting profitability and operational efficiency over the long term if not addressed.
Decreased Sales in Key Segments
Decreased sales in key segments like Consumer Brands can hinder overall growth and market competitiveness, necessitating strategic adjustments to regain momentum.

Sherwin-Williams Company (SHW) vs. SPDR S&P 500 ETF (SPY)

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 through multiple key streams. The Paint Stores Group, which accounts for a significant portion of the company's sales, includes over 4,800 retail locations that sell a variety of paint and coatings products directly to consumers and contractors. The Consumer Brands Group provides products to mass merchandisers and home improvement stores, further diversifying their retail presence. Additionally, the Global Coatings Group serves international markets, supplying industrial and protective coatings, which cater to sectors like automotive, aerospace, and construction. The company benefits from strategic partnerships with major retailers, allowing for broader distribution of its products. Moreover, Sherwin-Williams invests in innovation and product development to enhance its offerings, contributing to revenue growth. Overall, the combination of direct retail sales, partnerships, and diverse product lines plays a crucial role in the company's earnings.

Sherwin-Williams Company Key Performance Indicators (KPIs)

Any
Any
Net Profit by Segment
Net Profit by Segment
Reveals the profitability of each business segment, highlighting which areas are driving earnings and which might need strategic adjustments.
Chart InsightsSherwin-Williams' Paint Stores Group continues to drive growth, with net profit consistently rising, reflecting strategic focus and market leadership. However, the Consumer Brands Group struggles with underperformance, impacting overall profitability. The Performance Coatings Group faces margin pressures due to increased costs and restructuring expenses. Despite these challenges, the company remains committed to above-market growth, evidenced by increased restructuring efforts and investment in the Paint Stores Group. Reduced earnings guidance highlights ongoing demand and supply chain issues, but gross margin expansion offers a positive outlook.
Data provided by:Main Street Data

Sherwin-Williams Company Earnings Call Summary

Earnings Call Date:Jul 22, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 28, 2025
Earnings Call Sentiment Neutral
The call highlighted Sherwin-Williams' ability to maintain strong gross margins and expand its market share through strategic investments and restructuring, despite facing a challenging demand environment and reduced earnings guidance.
Q2-2025 Updates
Positive Updates
Consistent Gross Margin Expansion
Sherwin-Williams reported its twelfth consecutive quarter of year-over-year gross margin growth, demonstrating strong pricing effectiveness, particularly within the Paint Stores Group.
Successful Restructuring Initiatives
The company doubled its restructuring initiatives target to $105 million, anticipating annual savings of approximately $80 million, reflecting proactive cost management.
Strong Performance in Paint Stores Group
Despite a challenging environment, the Paint Stores Group reported sales increase by a low single-digit percentage with significant market share gains in residential repainting.
Expansion and Investments
Sherwin-Williams opened 20 net new stores in the quarter and 38 year-to-date, ahead of last year’s pace, with plans to continue aggressive investments in the Paint Stores Group.
Negative Updates
Reduced Full-Year Earnings Guidance
Due to a softer demand environment and supply chain inefficiencies, Sherwin-Williams reduced its full-year adjusted earnings guidance.
Decreased Sales in Key Segments
Consumer Brands Group sales were below expectations with volume, price mix, and FX all down, and Performance Coatings Group experienced a decrease in segment profit and margin.
Supply Chain Inefficiencies
The reduction in production gallons within the global supply chain pressured bottom-line results, highlighting operational challenges.
Choppy Demand Environment
The company faces continued turbulence and a slowdown in demand across various segments, businesses, and regions, affecting its sales outlook.
Company Guidance
During the call, The Sherwin-Williams Company provided updated guidance for the fiscal year 2025, reflecting a challenging demand environment. Consolidated sales were within the guided range, with the Paint Stores Group experiencing growth, while other segments faced softness. Despite gross margin expansion for the twelfth consecutive quarter, adjusted earnings per share decreased due to higher non-operating costs and growth investments. The company revised its full-year adjusted earnings guidance downward, citing softer-than-anticipated architectural sales volumes and supply chain inefficiencies, although this was partially offset by reduced SG&A spending. The restructuring initiative was expanded to $105 million, expected to yield $80 million in annual savings. Capital expenditures were reduced by $170 million, and the company returned $716 million to shareholders through share repurchases. The guidance emphasized ongoing investments in growth initiatives, particularly in the Paint Stores Group, and maintaining a disciplined approach to SG&A costs.

Sherwin-Williams Company Financial Statement Overview

Summary
Sherwin-Williams showcases strong profitability and cash flow generation, with a stable revenue growth and healthy margins. Despite high leverage, robust cash flow provides a buffer against financial uncertainties. High debt levels are a concern but mitigated by solid cash management.
Income Statement
82
Very Positive
Sherwin-Williams demonstrates strong profitability, with a gross profit margin of approximately 48.9% and a net profit margin of around 11% in TTM. Revenue has shown stable growth over the years, with a slight uptick in EBIT and EBITDA margins, indicating efficient operations. However, net income slightly decreased in the TTM compared to the previous year, which could be a concern if the trend continues.
Balance Sheet
75
Positive
The balance sheet reflects high leverage with a debt-to-equity ratio of about 2.9 in TTM, indicating considerable financial risk. However, the company has improved its equity base over the years, enhancing its equity ratio slightly. The return on equity stands strong at approximately 57.8%, showcasing effective equity utilization, though the high debt levels remain a potential risk.
Cash Flow
88
Very Positive
Sherwin-Williams exhibits robust cash flow generation, with a strong operating cash flow to net income ratio of 1.20 and a healthy free cash flow growth rate. The free cash flow to net income ratio is 0.85, indicating effective cash management despite high capital expenditures. Consistent positive cash flow trends provide a buffer against potential financial uncertainties.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue23.08B23.10B23.05B22.15B19.94B18.36B
Gross Profit11.28B11.20B10.76B9.33B8.54B8.68B
EBITDA4.34B4.49B4.15B3.54B3.16B3.44B
Net Income2.54B2.68B2.39B2.02B1.86B2.03B
Balance Sheet
Total Assets25.36B23.63B22.95B22.59B20.67B20.40B
Cash, Cash Equivalents and Short-Term Investments269.80M210.40M276.80M198.80M165.70M226.60M
Total Debt12.77B11.91B11.81B12.51B11.50B10.11B
Total Liabilities20.96B19.58B19.24B19.49B18.23B16.79B
Stockholders Equity4.40B4.05B3.72B3.10B2.44B3.61B
Cash Flow
Free Cash Flow2.15B2.08B2.63B1.28B1.87B3.10B
Operating Cash Flow3.06B3.15B3.52B1.92B2.24B3.41B
Investing Cash Flow-1.17B-1.20B-1.04B-1.61B-476.40M-322.40M
Financing Cash Flow-1.83B-2.02B-2.42B-282.40M-1.83B-3.02B

Sherwin-Williams Company Technical Analysis

Technical Analysis Sentiment
Negative
Last Price341.22
Price Trends
50DMA
354.11
Negative
100DMA
351.57
Negative
200DMA
348.76
Negative
Market Momentum
MACD
-4.72
Positive
RSI
38.43
Neutral
STOCH
30.07
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SHW, the sentiment is Negative. The current price of 341.22 is below the 20-day moving average (MA) of 353.21, below the 50-day MA of 354.11, and below the 200-day MA of 348.76, indicating a bearish trend. The MACD of -4.72 indicates Positive momentum. The RSI at 38.43 is Neutral, neither overbought nor oversold. The STOCH value of 30.07 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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

Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
74
Outperform
$6.08B13.8019.69%-1.01%50.58%
72
Outperform
$76.50B36.6222.92%0.96%0.57%25.50%
72
Outperform
$15.03B22.0322.54%1.74%0.51%17.21%
70
Neutral
$85.08B34.3862.43%0.90%0.31%2.66%
64
Neutral
$32.75B-167.60-0.84%2.06%4.55%-130.25%
63
Neutral
$23.49B18.6413.34%2.64%-10.59%-7.79%
61
Neutral
$10.43B7.12-0.05%2.87%2.86%-36.73%
* Basic Materials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
SHW
Sherwin-Williams Company
341.22
-28.77
-7.78%
ECL
Ecolab
269.71
21.45
8.64%
PPG
PPG Industries
104.09
-20.71
-16.59%
RPM
RPM International
117.19
-7.92
-6.33%
AXTA
Axalta Coating Systems
28.08
-7.32
-20.68%
DD
DuPont de Nemours
78.22
-7.12
-8.34%
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.Date of analysis: Sep 17, 2025