SHW
The Sherwin-Williams Company$335.45
Sell
Target $256.93
Report: Mar 12, 2026Basic Materials • Chemicals - Specialty • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$335.45-23.4%
Rec: SellConviction: Low
Entry Target
N/A
N/A
Fair Value
$256.93
(23% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$379.65
52 Week Low$301.58
Avg. 3 Month Volume1.80M
Efficiency
LTM Gross Margin48.8%
LTM EBITDA Margin21.2%
LTM EBIT Margin16.1%
LTM Operating Margin16.2%
LTM ROA10.1%
LTM ROE58.5%
LTM ROIC19.8%
LTM ROCE21.5%
Capital Structure
Market Cap (MM)$79.4B
Enterprise Value (MM)$92.2B
Shares Outstanding246.40M
Total Debt (MM)$12.94B
Cash & Equivalents (MM)$207.20M
LTM Net Debt (MM)$12.74B
LTM Net Debt/EBITDA2.6x
Growth
TTM Rev. Growth2.1%
Last 3-Yr Rev. CAGR2.1%
Last 3-Yr EBITDA CAGR8.0%
Last 3-Yr EPS CAGR9.9%
Valuation
Street Target Price$396.83
LTM EV/Revenue3.9x
LTM EV/Gross Profit8.0x
LTM EV/EBIT24.2x
LTM EV/EBITDA18.5x
LTM P/E30.9x
LTM EV/FCF34.7x
LTM P/FCF29.9x
LTM P/TB5.7x
LTM P/B17.3x
Dividend Yield1.0%
Payout Ratio30.4%
Executive SummarySituation: Current price is $335.45 versus fair value $256.93 (-23.4% expected return), and valuation confidence is stable. Debate: Bull case depends on Successful Suvenil integration delivering mid-single-digit Consumer Brands growth offsets DIY softness, validating moat in Latin America with $40-46M SG&A savings FY2026. Bear case centers on Moat erosion from technological disruption or low-cost competitors impairing pricing power, leading to gross margin decline below 48.8%. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
Paint Stores moat widens via 80-100 annual stores and 3.6% same-store sales growth Q3 2025; 48.8% gross margins exceed peer 41.2% median by 7.6 points sustaining ROIC 19.8%; $2,654M FCF supports $3.20 DPS up 1.3%.
Bear Case
Revenue growth slowed to 2.1% FY2025 with DIY high-single-digit declines; operating margins contracted 30bps to 16.2% from SG&A up 60bps and $465M interest; poor buyback timing with 2025 ROIs -3.5% to -8.5% at 20x+ EV/EBITDA.
Key Catalysts
Mid-Term (6-18 months)Impact: Moderate
Successful Suvenil integration delivering mid-single-digit Consumer Brands growth offsets DIY softness, validating moat in Latin America wit...
Mid-Term (6-18 months)Impact: High
Sherwin-Williams' compounding model is pressured by softer-for-longer demand, with 2.1% FY2025 revenue growth to $23,574M and operating marg...
Long-Term (18+ months)Impact: Moderate
Recent Q4 2025 earnings reaffirmed low-mid single-digit FY2026 sales and $11.50-11.90 adjusted EPS up 2.4% midpoint, making analysis timely...
Primary Risks
Concern: High
Moat erosion from technological disruption or low-cost competitors impairing pricing power, leading to gross margin decline below 48.8%.
Concern: Medium
Bear case models moat erosion with 1.5% growth and 15.5% margins yielding $159.16/share floor.
Concern: Medium
Stewardship is adequate with strong incentives (LTI 67% EPS/33% RONAE vesting 163.83% 2022-2024) and experienced board (ex-CEOs Whirlpool, P...
Recent Activity
2025-10-28SEC Filing (8-K)
+5.47%Sherwin-Williams reports Q3 2025 financial results with 3.2% sales growth and raised full-year guidance
2024-10-22SEC Filing (8-K)
-5.34%Sherwin-Williams reported Q3 2024 financial results with slight sales growth and reaffirmed full year guidance.
2024-07-23SEC Filing (8-K)
+6.87%Sherwin-Williams reported Q2 2024 financial results with modest sales growth and increased earnings guidance.
2023-01-26SEC Filing (8-K)
-8.92%Sherwin-Williams reported full year 2022 and Q4 results with record sales but lowered 2023 guidance due to challenging demand environment.
2022-07-27SEC Filing (8-K)
-8.78%Sherwin-Williams reported Q2 2022 financial results with 9.2% sales growth but earnings below expectations due to demand weakness and cost pressures.
Valuation Table
9.8/10Decision Grade
Scenario Range
$159
Bear
$236
Base
$289
Bull
$335