The Sherwin-Williams Company (SHW)
Valuation Overview•Is The Sherwin-Williams Company Overvalued or Undervalued?
Priced at a premium to peer multiples and intrinsic cash flows, demanding strong execution to justify current levels.
Moderate quality score of 59/100, reflecting stable operating margins and manageable leverage.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Average quality business weighed down by significant solvency concerns.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. However, capital return yields remain modest, anchored by a strong, well-covered dividend yield.
SHW demonstrates strong business quality with robust profitability and healthy margins. However, the balance sheet carries elevated leverage, requiring careful monitoring of debt servicing capabilities.
The company exhibits steady, low-single-digit revenue growth paired with robust earnings compounding (10.0% EPS 3Y CAGR). The company maintains healthy operational efficiency with a 16.1% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $5.7B | +2.1% | +2.1% | +5.1% | +7.6% | |
| EBITDA | $997.7M | — | +7.0% | — | — | |
| Net Income | $534.7M | -4.2% | +8.3% | — | +9.3% | |
| EPS (Diluted) | $2.15 | -2.7% | +10.0% | +6.9% | +10.7% | |
| Free Cash Flow | $800K | +27.4% | +27.7% | -3.1% | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 49.1% | 48.0% | 45.8% | 45.8% |
| Operating Margin | 16.1% | 16.0% | 15.0% | 14.1% |
| Net Margin | 10.9% | 11.0% | 10.3% | 9.9% |
| FCF Margin | 12.1% | 10.6% | 9.4% | 10.5% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $2.27 | $2.35 | +3.5% | ||
| Q1'26 | $2.16 | $2.23 | +3.2% | ||
| Q4'25 | $3.45 | $3.59 | +4.1% | ||
| Q3'25 | $3.76 | $3.38 | -10.1% | ||
| Q2'25 | $2.15 | $2.25 | +4.7% | ||
| Q1'25 | $2.06 | $2.09 | +1.5% | ||
| Q4'24 | $3.54 | $3.37 | -4.8% | ||
| Q3'24 | $3.48 | $3.70 | +6.3% |
Total return is -2.3% (1Y), lagging the benchmark by -27.3%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | -1.7% | -11.0% | — |
| 1Y | -2.3% | -27.3% | +1.0% |
| 3YCAGR | +9.9% | -10.4% | +3.6% |
| 5YCAGR | +4.5% | -8.5% | +5.0% |
| 10YCAGR | +13.5% | -0.4% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about The Sherwin-Williams Company (SHW) valuation, health, and returns.
The Sherwin-Williams Company is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. overvalued (implying -40.7% downside from DCF intrinsic value of $190.07)
The Sherwin-Williams Company has multiple valuation anchors: DCF Intrinsic Value: $190.07 | Peer Relative Fair Value: $197.18 | Wall Street Analyst Target: $374.56 (implying +16.8% upside). A convergence of these signals offers higher conviction.
The Sherwin-Williams Company displays fair financial health with a composite quality score of 59/100, supported by a Altman Z-Score of 3.0 (grey zone), Piotroski F-Score of 6/9, Return on Invested Capital (ROIC) of 16.5%.
The Sherwin-Williams Company pays a 1.0% dividend yield, covered by a 31% payout ratio with 41 years of growth, supplemented by a 0.0% buyback yield.
The Sherwin-Williams Company's current growth trajectory is Stable. The company achieved +2.1% 1Y revenue growth and -2.7% 1Y EPS growth, compared to its 3Y revenue CAGR of +2.1%.
Wall Street consensus is Buy based on 38 analysts, beating EPS expectations in 75% of recent quarters with a 3-quarter streak. The consensus price target represents a +16.8% change from current levels.
Investment risks for The Sherwin-Williams Company include: -21.9% 1-year max drawdown. Volatility risk is characterized by a beta of 0.77x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.