Sherwin-Williams Company (SHW) AI Stock Analysis

• Market Cap: $84.17B
• Dividend Yield: 0.94%
• Average Volume (3M): 1.35M
• Price to Earnings (P/E): 31.8
• Beta (1Y): 0.87
• Revenue Growth: 0.26%
• EPS Growth: 12.82%
• Country: US
• Employees: 63,890
• Sector: Basic Materials
• Sector Strength: 66
• Industry: Chemicals - Specialty
• EPS (TTM): 2.25
• Shares Outstanding: 250,600,590
• 10 Day Avg. Volume: 1,469,473
• 30 Day Avg. Volume: 1,346,552
• PEG Ratio: 2.95
• Price to Book (P/B): 19.74
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 48.01
• Enterprise Value/Market Cap: 0.87
• Enterprise Value/Revenue: 0.80
• Enterprise Value/Gross Profit: 6.55
• Enterprise Value/Ebitda: 4.17
• 1Y Price Target: $400.78
• Price Target Upside: 19.32% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 12

• Rating: 69 Neutral
• Price Target: $368.00 ▲(9.56%Upside)

Sherwin-Williams' overall score reflects its strong financial performance, which is the most significant factor contributing to its stability in the Chemicals - Specialty industry. While the earnings call confirmed solid results, technical indicators suggest a bearish trend, and high valuation metrics indicate potential overvaluation. Demand challenges and external pressures also weigh on the stock's prospects.

Positive Factors

Market Performance

SHW is poised for share gains given growing tailwinds from raw material deflation and a more resilient housing market.

Store Strategy

Increased store density in key MSAs is driving significant share gains, with further density and white space opportunities still ahead.

Technology Investments

Technology investments have improved sales reps' abilities to anticipate customer orders, making SHW faster and more precise than its peers.

Negative Factors

Economic Conditions

Profitability came in better than expected despite lighter sales.

Sales Performance

This reflects the first quarter of SSS underperformance since 2Q22, a ten quarter stretch that saw SSS outperform P&WP by an average of ~260 bps.

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 makes money primarily through the sale of paints and coatings products. The company's revenue model is driven by its three reportable segments: The Americas Group, Consumer Brands Group, and Performance Coatings Group. The Americas Group generates revenue by selling directly to professional contractors and DIY customers through a network of over 4,000 company-operated stores. The Consumer Brands Group sells products under well-known brands to retailers and distributors, including home centers, independent paint dealers, and hardware stores. The Performance Coatings Group provides advanced coating solutions for industrial applications, serving sectors such as automotive, aerospace, and construction. Strategic partnerships with major retailers and a focus on innovation and quality contribute significantly to Sherwin-Williams' earnings.

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
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
23.04B	23.10B	23.05B	22.15B	19.94B	18.36B
	Gross Profit
11.22B	11.20B	10.76B	9.33B	8.54B	8.68B
	EBIT
3.80B	3.77B	3.52B	2.98B	2.58B	2.86B
	EBITDA
4.47B	3.77B	4.15B	3.97B	3.57B	3.87B
	Net Income Common Stockholders
2.68B	2.68B	2.39B	2.02B	1.86B	2.03B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
199.80M	210.40M	276.80M	198.80M	165.70M	226.60M
	Total Assets
24.64B	23.63B	22.95B	22.59B	20.67B	20.40B
	Total Debt
12.82B	11.91B	11.81B	12.51B	11.50B	10.11B
	Net Debt
12.62B	11.70B	11.53B	12.31B	11.33B	9.89B
	Total Liabilities
20.51B	19.58B	19.24B	19.49B	18.23B	16.79B
	Stockholders Equity
4.13B	4.05B	3.72B	3.10B	2.44B	3.61B
Cash Flow		Free Cash Flow
2.18B	2.08B	2.63B	1.28B	1.87B	3.10B
	Operating Cash Flow
3.15B	3.15B	3.52B	1.92B	2.24B	3.41B
	Investing Cash Flow
-1.19B	-1.20B	-1.04B	-1.61B	-476.40M	-322.40M
	Financing Cash Flow
-1.94B	-2.02B	-2.42B	-282.40M	-1.83B	-3.02B

Sherwin-Williams Company Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 335.88
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: 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 335.88 is below the 20-day moving average (MA) of 356.56, below the 50-day MA of 347.14, and below the 200-day MA of 358.42, indicating a bearish trend. The MACD of 0.36 indicates Positive momentum. The RSI at 34.36 is Neutral, neither overbought nor oversold. The STOCH value of 29.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SHW.

Sherwin-Williams Company Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AXTA	77 Outperform	$6.29B	14.10	23.59%	―	0.96%	82.78%
SHW	69 Neutral	$84.17B	31.78	70.22%	0.94%	0.26%	12.82%
EMN	68 Neutral	$8.80B	9.70	16.16%	4.36%	2.78%	1.50%
DD	65 Neutral	$27.99B	40.24	0.06%	2.45%	4.51%	-121.68%
RPM	64 Neutral	$13.88B	21.65	25.53%	1.89%	-0.61%	15.06%
PPG	58 Neutral	$24.13B	18.01	18.47%	2.56%	-7.67%	-0.58%
Sector *	51 Neutral	$2.03B	-1.27	-21.09%	3.98%	2.91%	-30.50%

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.