Last Update 11 Dec 25

Fair value Decreased 0.18%

SHW: Pricing Power And Margin Discipline Will Drive Upside Through Macro Volatility

The analyst price target for Sherwin-Williams has been modestly increased to about $386 from roughly $386, as analysts balance cautious views on a challenging macro environment and uneven end markets with support from select target raises and an unchanged long-term earnings multiple outlook.

Analyst Commentary

Recent research updates on Sherwin-Williams reflect a mixed but generally constructive stance, with modest target changes capturing both improving company specific execution and ongoing macro uncertainty across key end markets.

Bullish Takeaways

Bullish analysts see room for upside to the current share price, lifting targets into the high $380s to $400 range as they gain confidence in the company’s ability to execute through cyclical softness.
Supportive views highlight Sherwin-Williams resilient pricing power and margin discipline, which are seen as key drivers for sustaining earnings growth even with subdued volume trends.
Some bullish analysts argue that current valuation remains reasonable relative to the company’s long term earnings compounding potential, particularly as demand normalizes and project activity recovers.
Incremental target raises signal improving conviction that management can navigate near term volatility while preserving the long term growth algorithm that investors have historically rewarded with a premium multiple.

Bearish Takeaways

Bearish analysts emphasize a still challenging macro backdrop, noting that volumes remain under pressure across several industrial and construction related end markets, which limits near term growth visibility.
Concerns persist that uneven demand and slippage in some commodity exposed businesses could constrain operating leverage, making it harder for Sherwin-Williams to deliver upside to consensus estimates.
Some cautious views argue that the stock already embeds a full long term multiple, leaving less margin of safety if macro trends worsen or if seasonal patterns remain weaker than historical norms.
The combination of negative company messaging on the broader chemicals landscape and inconsistent industrial activity leads bearish analysts to favor a more neutral stance until clearer signs of volume recovery emerge.

What's in the News

Sherwin-Williams announced that long time Senior Vice President, Finance and Chief Financial Officer Allen J. Mistysyn will retire at the close of business on December 31, 2025, transitioning to a short term non officer role, with veteran finance executive Benjamin E. Meisenzahl appointed as the new SVP, Finance and CFO effective January 1, 2026 (company announcement).
Incoming CFO Benjamin E. Meisenzahl brings 22 years of Sherwin-Williams experience, including leadership of Treasury, Tax, Finance Transformation and Global Business Services, and prior finance and operational roles across Paint Stores, Performance Coatings and Global Supply Chain (company announcement).
The company issued updated guidance, expecting fourth quarter 2025 net sales to increase low to mid single digit percentage and full year 2025 consolidated net sales to rise a low single digit percentage versus 2024 (company guidance).
Sherwin-Williams now forecasts 2025 diluted net income per share of $10.16 to $10.36, including acquisition related amortization of $0.77 per share and $0.32 per share of severance and restructuring expenses, compared with $10.55 per share in 2024 (company guidance).
From July 1 to September 30, 2025, Sherwin-Williams repurchased 2 million shares, or about 0.81 percent of shares outstanding, for $668.2 million, bringing total buybacks under its long running program to 105.025 million shares, or 37.44 percent, for $15.89 billion (company filing).

Valuation Changes

Fair Value Estimate has edged down slightly to about $385.81 from roughly $386.52, implying a negligible change in the intrinsic valuation framework.
Discount Rate has risen marginally to approximately 7.85 percent from about 7.85 percent, reflecting a very small increase in the assumed cost of capital.
Revenue Growth has eased slightly to around 4.56 percent from roughly 4.56 percent, signaling a modestly more conservative top line outlook.
Net Profit Margin has dipped slightly to about 12.58 percent from roughly 12.60 percent, indicating a very small reduction in expected profitability levels.
Future P/E has ticked down marginally to about 34.13 times from roughly 34.13 times, suggesting an almost unchanged long term valuation multiple assumption.

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