Last Update 09 Feb 26

Fair value Increased 0.30%

SHW: Mixed Rating Shifts And Modest Outlook Tweaks Will Test Pricing Power

The Analyst Price Target for Sherwin-Williams has been lifted by about $1 to $387.43, as analysts factor in a slightly lower discount rate and modest tweaks to revenue growth, profit margin, and future P/E assumptions following a mix of recent target raises and trims across the Street.

Analyst Commentary

Recent Street research on Sherwin-Williams reflects a mix of higher and lower price targets, along with at least one upgrade and one downgrade, creating a balanced but divided view on the shares.

Bullish Takeaways

Bullish analysts have raised targets by as much as US$20 in recent notes, signaling confidence that the current valuation can be supported if management continues to execute on its plan for revenue and margin performance.
Several target hikes in close succession suggest some analysts see room for upside in the existing P/E assumptions, even after the latest round of price target trims elsewhere on the Street.
The upgrade to a Buy rating with a US$371 target indicates that at least one firm sees the current share price as offering a reasonable entry point, assuming Sherwin-Williams can meet or modestly improve on its current fundamentals.
Incremental target increases of US$5 to US$10 point to an argument that small improvements in growth or profitability metrics could have a meaningful effect on fair value estimates.

Bearish Takeaways

Bearish analysts have lowered price targets in the latest round of updates, with cuts such as US$422 to US$415 and US$371 to US$370, reflecting tighter assumptions around the risk and reward trade off at current prices.
A downgrade to Hold on valuation signals concern that the shares may already discount a fair amount of execution success, leaving less room for error if growth or margins come in below expectations.
Some research points to a more cautious view on chemicals and related end markets, highlighting issues like growing oversupply and an inconsistent backdrop that could weigh on volume growth and pricing power.
While potential catalysts such as positive PMI trends, rate cuts, or capacity rationalization in China are flagged, bearish analysts emphasize that these are early and not reliable enough yet to underpin more aggressive valuation multiples.

What's in the News

The Sherwin-Williams Company is actively looking for acquisitions, with management stating that they plan to keep evaluating deals that fit and accelerate the company's strategy (Key Developments).
From October 1, 2025 to December 31, 2025, Sherwin-Williams repurchased 350,000 shares, about 0.14% of shares, for US$117.09m, completing a long running buyback that totaled 105,375,000 shares, about 37.58%, for US$16,007.44m under the program announced on October 20, 2011 (Key Developments).
For the first quarter of 2026, Sherwin-Williams expects consolidated net sales to increase by a mid single-digit percentage (Key Developments).
For full year 2026, the company expects consolidated net sales to increase by a low to mid single-digit percentage and diluted net income per share to be between US$10.70 and US$11.10 (Key Developments).

Valuation Changes

The Fair Value Estimate has risen slightly from US$386.29 to US$387.43, reflecting a very small adjustment in the underlying model.
The Discount Rate has fallen slightly from 7.87% to 7.65%, which modestly increases the present value of projected cash flows.
Revenue Growth has eased marginally from 4.68% to 4.65%, indicating a very small change in the top line outlook used in the model.
The Net Profit Margin has edged down from 12.71% to 12.54%, pointing to slightly more conservative profitability assumptions.
The Future P/E has moved fractionally lower from 33.70x to 33.67x, showing a minimal shift in the valuation multiple applied to earnings.

Strategic expansion of stores and investments in growth initiatives position the company for increased market share and top-line growth as industry conditions improve.
Enhanced cost controls, restructuring, and R&D drive better margins, product innovation, and international opportunities for long-term earnings and competitive strength.
Weak demand, operating inefficiencies, and overexposure to North America increase Sherwin-Williams' risks of margin pressure, delayed recovery, and greater earnings vulnerability.

Catalysts

About Sherwin-Williams

Engages in the development, manufacture, distribution, and sale of paint, coatings, and related products to professional, industrial, commercial and retail customers.What are the underlying business or industry changes driving this perspective?

Sherwin-Williams is aggressively expanding its company-owned store footprint and field rep network-opening 80 to 100 new stores annually-despite current market softness, positioning it to capture significant incremental revenue and market share as housing turnover and construction activity rebound with lower rates and improved consumer confidence.
Heightened investment in targeted customer-facing growth initiatives during a period of competitor retrenchment, layoffs, and price disruptions in the industry is likely to accelerate share gains with professional contractors and commercial projects, supporting long-term topline growth substantially above industry averages.
The company's sustained focus on cost control, broad and deep restructuring (doubling annual savings targets to ~$80 million), and disciplined SG&A management is structurally improving fixed cost leverage and expected to yield improved net margins and earnings power as sales volumes recover.
Ongoing construction of a new R&D center and increased R&D investment is expected to accelerate the rollout of premium, environmentally friendly, and specialty coatings that command higher price points, supporting future gross margin expansion and increasing competitive differentiation as sustainability and performance requirements intensify.
Despite headwinds in North America, growth and acquisition activity in Europe, Asia, and Latin America (such as the Suvinil acquisition) are expanding Sherwin-Williams' global addressable market, providing new opportunities for sales and earnings expansion as urbanization and infrastructure development continue in emerging markets.

Sherwin-Williams Earnings and Revenue Growth

Sherwin-Williams Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Sherwin-Williams's revenue will grow by 4.5% annually over the next 3 years.
Analysts assume that profit margins will increase from 11.0% today to 13.0% in 3 years time.
Analysts expect earnings to reach $3.4 billion (and earnings per share of $14.22) by about September 2028, up from $2.5 billion today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 33.3x on those 2028 earnings, down from 35.3x today. This future PE is greater than the current PE for the US Chemicals industry at 25.9x.
Analysts expect the number of shares outstanding to decline by 0.88% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 7.57%, as per the Simply Wall St company report.

Sherwin-Williams Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Prolonged weak demand in key end markets such as new residential construction, DIY, and Coil Coatings, with management expecting a softer-for-longer environment and signaling potential for further deterioration-could pressure overall revenue and delay a rebound in sales volumes.
Downward revisions to sales and earnings guidance due to lower-than-expected architectural sales volumes and efficiency pressures in the global supply chain-indicate ongoing operating margin risk and near-term earnings headwinds.
Ongoing supply chain inefficiencies triggered by reduced production volumes, plus heavily fixed cost manufacturing (60%), amplify the risk of margin compression and reduced gross profit during periods of weak demand.
Overreliance on North American markets, combined with muted growth or even contraction (e.g., DIY and new residential softness, and headwinds from tariffs), increases vulnerability to regional economic slowdowns and limits diversification of revenue streams.
Consumer Brands and Performance Coatings segments displayed margin contraction, unfavorable regional and product mix, and exposure to foreign currency volatility; persistent weakness or intensified price competition from global rivals could put longer-term pressure on company-wide net margins and earnings.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $379.524 for Sherwin-Williams based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $420.0, and the most bearish reporting a price target of just $258.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $26.3 billion, earnings will come to $3.4 billion, and it would be trading on a PE ratio of 33.3x, assuming you use a discount rate of 7.6%.
Given the current share price of $361.38, the analyst price target of $379.52 is 4.8% higher. The relatively low difference between the current share price and the analyst consensus price target indicates that they believe on average, the company is fairly priced.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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