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Sherwin-Williams (SHW)
NYSE:SHW
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Sherwin-Williams Company
(NYSE:SHW)
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Rating:73Outperform
Price Target:
$390.00
▲(9.97% Upside)
SHW scores well on fundamentals, led by strong revenue/profitability and solid free-cash-flow growth, with supportive (but not explosive) technical momentum. The score is held back by elevated leverage and a demanding valuation (high P/E and low yield), while the latest guidance is constructive but tempered by persistent demand softness and cost/interest headwinds.
Positive Factors
Revenue & Margin Strength
Consistent top-line growth with a high gross margin and healthy net margin indicates durable product pricing power and operational efficiency. These fundamentals support steady earnings, fund reinvestment in stores/products, and provide resilience through typical demand cycles over the next 2–6 months.
Free Cash Flow & Returns
Strong cash generation and high FCF conversion give the company durable financial flexibility: funds for capex, acquisitions, dividends and opportunistic buybacks. Persistent cash strength also underpins the company's ability to invest in store expansion and absorb cyclical revenue weakness without immediate capital strain.
Strategic M&A & Distribution Expansion
Acquiring Suvenil expands Sherwin‑Williams' exposure to higher-growth Brazil/LatAm markets and complements its existing channels. Coupled with plans for 80–100 net new stores, the M&A plus retail expansion strengthens long-term market reach and recurring professional customer access across regions.
Negative Factors
Elevated Leverage
A materially elevated debt-to-equity ratio reduces financial flexibility and raises refinancing and interest-rate sensitivity. In a higher-rate or weaker-demand environment, leverage could constrain capital allocation, limit optionality on buybacks or M&A, and increase the need to prioritize deleveraging over growth.
Persistent End‑Market Softness
Management's view of prolonged weakness in DIY, industrial and new construction implies constrained volume growth and muted organic top-line momentum. That durable demand softness increases reliance on pricing, mix and M&A to sustain growth and raises execution risk if those levers underperform.
Input & Financing Cost Pressure
Concurrent raw-material/tariff inflation and ~ $90M of additional interest expense are structural margin headwinds. Over several quarters, these pressures force tougher pricing and efficiency trade-offs; failure to fully offset them would compress adjusted margins and reduce free cash available for capital returns or debt paydown.
Sherwin-Williams Company (SHW) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$87.91B
Dividend Yield0.98%
Average Volume (3M)1.50M
Price to Earnings (P/E)34.6
Beta (1Y)0.72
Revenue Growth0.96%
EPS Growth1.96%
CountryUS
Employees63,890
SectorBasic Materials
Sector Strength58
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)2.23
Shares Outstanding247,893,510
10 Day Avg. Volume1,819,178
30 Day Avg. Volume1,501,149
Financial Highlights & Ratios
PEG Ratio2.26
Price to Book (P/B)21.32
Price to Sales (P/S)3.74
P/FCF Ratio41.46
Enterprise Value/Market Cap1.14
Enterprise Value/Revenue4.32
Enterprise Value/Gross Profit8.85
Enterprise Value/Ebitda22.88
Forecast
1Y Price Target
$395.67Price Target Upside11.57% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering13
EPS Forecast (FY)12.11
Revenue Forecast (FY)$24.61B
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 Income Statement (score 85) with 8.48% TTM revenue growth and solid profitability (48.88% gross margin; 11.05% net margin), plus healthy Cash Flow (score 78) with 12.62% TTM free-cash-flow growth. The main drag is Balance Sheet leverage (score 70) with a high 3.07 debt-to-equity ratio despite strong 26.52% ROE.Income Statement
Sherwin-Williams has demonstrated strong revenue growth with a TTM increase of 8.48%, supported by a solid gross profit margin of 48.88%. The net profit margin remains healthy at 11.05%, indicating efficient cost management. However, there is a slight decline in EBIT and EBITDA margins compared to the previous year, suggesting potential cost pressures.85
Very Positive
Balance Sheet
The company maintains a high debt-to-equity ratio of 3.07, which could pose financial risk if not managed carefully. However, the return on equity is robust at 26.52%, reflecting strong profitability relative to shareholder equity. The equity ratio is moderate, indicating a balanced asset structure.70
Positive
Cash Flow
Sherwin-Williams shows a positive free cash flow growth rate of 12.62% TTM, highlighting improved cash generation. The operating cash flow to net income ratio is 0.44, suggesting adequate cash flow relative to earnings. The free cash flow to net income ratio of 0.74 indicates efficient conversion of earnings into cash.78
Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 23.28B | 23.10B | 23.05B | 22.15B | 19.94B | 18.36B |
| Gross Profit | 11.38B | 11.20B | 10.76B | 9.33B | 8.54B | 8.68B |
| EBITDA | 4.40B | 4.49B | 4.15B | 3.54B | 3.16B | 3.44B |
| Net Income | 2.57B | 2.68B | 2.39B | 2.02B | 1.86B | 2.03B |
Balance Sheet | ||||||
| Total Assets | 26.21B | 23.63B | 22.95B | 22.59B | 20.67B | 20.40B |
| Cash, Cash Equivalents and Short-Term Investments | 241.50M | 210.40M | 276.80M | 198.80M | 165.70M | 226.60M |
| Total Debt | 13.58B | 11.91B | 11.81B | 12.51B | 11.50B | 10.11B |
| Total Liabilities | 21.78B | 19.58B | 19.24B | 19.49B | 18.23B | 16.79B |
| Stockholders Equity | 4.43B | 4.05B | 3.72B | 3.10B | 2.44B | 3.61B |
Cash Flow | ||||||
| Free Cash Flow | 2.43B | 2.08B | 2.63B | 1.28B | 1.87B | 3.10B |
| Operating Cash Flow | 3.29B | 3.15B | 3.52B | 1.92B | 2.24B | 3.41B |
| Investing Cash Flow | -2.18B | -1.20B | -1.04B | -1.61B | -476.40M | -322.40M |
| Financing Cash Flow | -1.11B | -2.02B | -2.42B | -282.40M | -1.83B | -3.02B |
Sherwin-Williams Company Technical Analysis
Positive
354.64
Price Trends
337.47
Positive
339.43
Positive
344.30
Positive
Market Momentum
4.77
Positive
59.67
Neutral
52.07
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 354.64 is above the 20-day moving average (MA) of 348.17, above the 50-day MA of 337.47, and above the 200-day MA of 344.30, indicating a bullish trend. The MACD of 4.77 indicates Positive momentum. The RSI at 59.67 is Neutral, neither overbought nor oversold. The STOCH value of 52.07 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $7.16B | 16.11 | 21.75% | ― | -1.83% | 40.64% | |
73 Outperform | $87.91B | 34.57 | 59.39% | 0.98% | 0.96% | 1.96% | |
71 Outperform | $13.70B | 20.60 | 22.72% | 1.96% | 3.09% | 12.25% | |
68 Neutral | $25.95B | 16.66 | ― | 2.71% | -12.98% | -11.34% | |
66 Neutral | $79.87B | 40.56 | 21.73% | 1.01% | 1.38% | -2.54% | |
61 Neutral | $10.43B | 7.12 | -0.05% | 2.87% | 2.86% | -36.73% | |
60 Neutral | $18.40B | -23.84 | -0.46% | 1.74% | 2.42% | -196.54% |
* Basic Materials Sector Average
SHW
Sherwin-Williams Company
354.64
0.16
0.04%
ECL
Ecolab
281.99
35.02
14.18%
PPG
PPG Industries
115.63
6.52
5.98%
RPM
RPM International
106.96
-12.23
-10.26%
AXTA
Axalta Coating Systems
33.58
-1.53
-4.36%
DD
DuPont de Nemours
43.92
12.77
41.00%
Sherwin-Williams Company Corporate Events
Private Placements and Financing
Sherwin-Williams Extends Credit Agreement to 2030
Neutral
Nov 17, 2025
On November 17, 2025, Sherwin-Williams Company entered into an Amended and Restated Credit Agreement with Citicorp USA, Inc. and other lenders, extending the maturity of $75 million in commitments from December 20, 2025, to December 20, 2030. This agreement maintains similar terms to the previous one, ensuring continuity in financial arrangements and potentially stabilizing the company’s financial operations.
The most recent analyst rating on (SHW) stock is a Hold with a $392.00 price target. To see the full list of analyst forecasts on Sherwin-Williams Company stock, see the SHW Stock Forecast page.
Business Operations and StrategyPrivate Placements and Financing
Sherwin-Williams Extends Credit Agreement with Citicorp
Positive
Nov 5, 2025
On November 5, 2025, Sherwin-Williams Company amended its Credit Agreement with Citicorp USA, Inc., extending the maturity of $125 million in commitments from December 2025 to December 2030. This amendment is part of Sherwin-Williams’ financial strategy to maintain flexibility and ensure long-term liquidity, potentially impacting its financial operations and stakeholder relationships positively.
The most recent analyst rating on (SHW) stock is a Hold with a $392.00 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.