Last Update 10 Mar 26

Fair value Increased 0.18%

SHW: Mixed Rating Resets And Active Capital Returns Will Shape Future Pricing Power

The updated analyst price target for Sherwin-Williams reflects a modest fair value adjustment of about $1. Analysts are factoring in slightly lower discount rate and revenue growth assumptions, a small trim to expected profit margins, and a marginally higher future P/E multiple following recent earnings and mixed, but active, target revisions across the Street.

Analyst Commentary

Recent research updates on Sherwin-Williams reflect a mix of optimism and caution, with several firms adjusting price targets and ratings after the latest earnings and sector reviews. Here is how bullish and bearish analysts are framing the risk reward right now.

Bullish Takeaways

Bullish analysts are lifting price targets by increments of about $5 to $20, suggesting they see room for the shares to better reflect Sherwin-Williams' execution and earnings profile.
Some updated models after earnings support higher valuation multiples, with targets in the low to mid $400s indicating confidence in the company’s ability to support a premium P/E over time.
One upgrade to Buy with a target around the high $300s signals that some see the current share price as leaving upside if Sherwin-Williams continues to deliver on its operating plan.
Where price targets are trimmed only slightly, bullish analysts still maintain positive ratings, signaling that they see any recalibration as fine tuning rather than a change in thesis.

Bearish Takeaways

Bearish analysts have downgraded the stock to more neutral stances, citing valuation as a key concern after the share price move relative to their assessment of fundamentals.
Modest price target reductions, such as cuts of around $5 to $7, point to some caution on how much investors should be willing to pay for the current growth and margin outlook.
Sector level comments highlight risks tied to chemicals and related markets, including references to oversupply and uneven demand, which could weigh on Sherwin-Williams if conditions stay mixed.
Where targets remain in the $370 to low $400 range but ratings are neutral, bearish analysts appear focused on execution risk and the possibility that the shares already discount a solid operating performance.

What's in the News

The Board of Directors approved a regular quarterly dividend of $0.80 per common share, payable on March 13, 2026, to shareholders of record on March 2, 2026, following 47 consecutive years of dividend increases (company announcement).
A class action complaint was filed in San Joaquin County Superior Court alleging multiple violations of the California Labor Code, including issues related to minimum and overtime wages, meal and rest periods, wage statements, expense reimbursement, sick pay, and timing of wage payments (court filing).
The company issued earnings guidance for 2026, indicating expectations for consolidated net sales to be up low to mid single digit percent for the year, and diluted net income per share in a range of $10.70 to $11.10 (company guidance).
Management indicated that Sherwin-Williams is looking for acquisitions, with the CEO stating that the company will continue to evaluate deals that fit and accelerate its strategy (management commentary).
Between October 1, 2025 and December 31, 2025, the company repurchased 350,000 shares for $117.09 million, and reported completing the repurchase of 105,375,000 shares for $16,007.44 million under the buyback program announced on October 20, 2011 (company buyback update).

Valuation Changes

Fair Value: Adjusted slightly higher from $387.43 to $388.14 per share, reflecting a very modest change in the model output.
Discount Rate: Reduced slightly from 7.70% to about 7.62%, which gives a bit more weight to future cash flows in the valuation work.
Revenue Growth: Trimmed marginally from about 4.65% to roughly 4.62%, signaling a small reset to top line expectations in the model.
Net Profit Margin: Eased slightly from about 12.54% to around 12.39%, indicating a small change to the long run profitability assumption.
Future P/E: The assumed forward P/E multiple has been nudged up from about 33.86x to roughly 34.28x, suggesting a small adjustment to how much investors might be willing to pay for earnings in the model.

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Key Takeaways

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.

Execution Will Drive Recovery Amid Demand Challenges And Macro Uncertainty