SHW AI Stock Analysis – Buy, Hold, or Avoid?
The Sherwin-Williams Company (SHW)
Sherwin-Williams (SHW) remains a fundamentally strong market leader with resilient earnings and steady growth, but faces notable short-term technical weakness and elevated financial risk due to high leverage and liquidity constraints. The stock is fairly valued at current levels, with most upside dependent on macro recovery and execution on growth initiatives. Investors should maintain positions but exercise caution given the risk/reward balance and lack of immediate technical or valuation catalysts.
Fundamentals
Sherwin-Williams (SHW) demonstrates resilient fundamental performance, posting steady revenue growth and consistent earnings beats in recent quarters. While the stock trades at a premium valuation, its leadership in specialty coatings, strong profitability, and sustained operational momentum underpin a broadly positive investment thesis despite cyclical and valuation risks.
Financial Highlights
- Revenue
- Net Income
- Net Margin (%)
Revenue
6.81% YoY
Q1 2026
Net Income
6.11% YoY
Q1 2026
Net Margin
Q1 2026
Growth Metrics
Revenue Growth YoY
Latest Quarter: Q1 2026
Net Income Growth YoY
Latest Quarter: Q1 2026
Revenue Per Share Growth YoY
Latest Quarter: Q1 2026
EPS Growth YoY
Latest Quarter: Q1 2026
Book Value Per Share Growth YoY
Latest Quarter: Q1 2026
| Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | |
|---|---|---|---|---|---|---|---|---|
| Revenue | 5.7B | 5.6B | 6.4B | 6.3B | 5.3B | 5.3B | 6.2B | 6.3B |
| Revenue Growth YoY | +6.81% | +5.64% | +3.18% | +0.69% | -1.15% | +0.86% | +0.75% | +0.50% |
| Net Income | 534.7M | 476.8M | 833.1M | 754.7M | 503.9M | 480.1M | 806.2M | 889.9M |
| Net Income Growth YoY | +6.11% | -0.69% | +3.34% | -15.19% | -0.26% | +34.78% | +5.87% | +12.12% |
| EPS | $2.18 | $1.94 | $3.38 | $3.04 | $2.02 | $1.92 | $3.22 | $3.55 |
| EPS Growth YoY | +7.92% | +1.04% | +4.97% | -14.37% | +1.00% | +37.14% | +7.69% | +14.52% |
Profitability Metrics
Gross Margin
TTM
Operating Margin
TTM
Net Margin
TTM
Return on Equity
TTM
Return on Assets
TTM
| Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | |
|---|---|---|---|---|---|---|---|---|
| Gross Margin | 49.07% | 48.84% | 49.16% | 49.38% | 48.23% | 48.58% | 49.13% | 48.85% |
| Operating Margin | 14.31% | 13.92% | 18.44% | 17.41% | 14.22% | 12.71% | 18.35% | 19.64% |
| Net Margin | 9.44% | 8.52% | 13.10% | 11.95% | 9.50% | 9.06% | 13.08% | 14.19% |
| Return on Equity (ROE) | 12.07% | 10.37% | 18.83% | 17.15% | 12.20% | 11.85% | 19.40% | 23.72% |
| Return on Assets (ROA) | 3.69% | 3.43% | 5.57% | 5.39% | 3.75% | 3.83% | 6.37% | 7.16% |
Technical Analysis
SHW is currently in a strong downtrend, trading below key moving averages with bearish momentum indicated by a death cross and weak MACD signals. The stock is range-bound near its 52-week lows with important support around $303.52 and resistance near $330. Significant bearish patterns and volume declines reinforce a cautious short-term technical outlook.
No extreme reading
Price in downtrend
Range-bound market
50 below 200 - bearish
Key Technical Values
Price with Moving Averages
50-day, 150-day and 200-day simple moving averages
Relative Strength Index
Momentum oscillator measuring speed and magnitude of price changes
RSI (14)
Earnings
Sherwin-Williams (SHW) demonstrates resilient fundamental performance, posting steady revenue growth and consistent earnings beats in recent quarters. While the stock trades at a premium valuation, its leadership in specialty coatings, strong profitability, and sustained operational momentum underpin a broadly positive investment thesis despite cyclical and valuation risks.
Latest Earnings
Q1 2026 Earnings (Mar 31, 2026)
Earnings Per Share (EPS)
Actual
$2.35
Estimated
$2.27
Surprise
+$0.08
Surprise %
+3.52%
Revenue
Actual
$5.67B
Estimated
$5.56B
Surprise
+$106.05M
Surprise %
+1.91%
Historical Earnings
| Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | |
|---|---|---|---|---|---|---|---|---|
| Earnings Per Share | ||||||||
| EPS (Actual) | $2.35 | $2.23 | $3.59 | $3.38 | $2.25 | $2.09 | $3.37 | $3.70 |
| EPS (Estimated) | $2.27 | $2.16 | $3.45 | $3.76 | $2.15 | $2.06 | $3.54 | $3.48 |
| EPS Surprise | +$0.08 | +$0.07 | +$0.14 | -$0.38 | +$0.10 | +$0.03 | -$0.17 | +$0.22 |
| % Diff | +3.5% | +3.2% | +4.1% | -10.1% | +4.7% | +1.5% | -4.8% | +6.3% |
| Revenue | ||||||||
| Revenue (Actual) | $5.67B | $5.6B | $6.36B | $6.31B | $5.31B | $5.3B | $6.16B | $6.27B |
| Revenue (Estimated) | $5.56B | $5.57B | $6.2B | $6.29B | $5.4B | $5.32B | $6.2B | $6.33B |
| Revenue Surprise | +$106.05M | +$30.54M | +$153.5M | +$20.79M | -$93.33M | -$22.03M | -$37.99M | -$59.23M |
| % Diff | +1.9% | +0.5% | +2.5% | +0.3% | -1.7% | -0.4% | -0.6% | -0.9% |
Valuation
Sherwin-Williams (SHW) demonstrates robust financial health with steady revenue growth and solid profitability metrics, supported by strong operational performance. Its valuation multiples reflect a premium positioning within the specialty chemicals sector, albeit with some divergence between short-term market price and analyst estimated fair values, suggesting moderate upside potential.
Valuation Metrics
Price to Earnings
TTM
Price to Sales
TTM
Price to Book
TTM
Enterprise Value to EBITDA
TTM
Enterprise Value to Revenue
TTM
| Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | |
|---|---|---|---|---|---|---|---|---|
| Price to Earnings | 36.82 | 41.86 | 25.58 | 28.31 | 43.21 | 44.73 | 29.66 | 20.86 |
| Price to Sales | 13.90 | 14.27 | 13.41 | 13.53 | 16.41 | 16.22 | 15.52 | 11.84 |
| Price to Book | 17.77 | 17.36 | 19.26 | 19.42 | 21.09 | 21.20 | 23.01 | 19.79 |
| Enterprise Value to EBITDA | 92.54 | 108.38 | 73.32 | 77.70 | 108.65 | 111.41 | 83.87 | 60.06 |
| Enterprise Value to Revenue | 16.29 | 16.83 | 15.51 | 15.51 | 18.79 | 18.42 | 17.45 | 13.77 |
Sentiment & Analyst Ratings
Market sentiment around Sherwin-Williams (SHW) is cautiously optimistic with predominantly positive analyst ratings and steady news coverage highlighting solid earnings beats and growth initiatives. While the stock is trading below its 52-week high amid macroeconomic concerns, analysts largely view SHW as undervalued with attractive upside potential driven by expansion and product innovation. Retail social sentiment appears muted but steady, reflecting a measured, value-focused investor base.
Analyst Recommendations
Risk Assessment
Sherwin-Williams currently exhibits notable financial leverage and tight liquidity with its current and quick ratios below optimal levels, reflecting potential short-term funding strain. The company faces significant macroeconomic headwinds including inflation, high interest rates, and a softening demand outlook which pressures growth and earnings stability. Despite these challenges, its market position and operational scale provide some resilience, though elevated debt levels and valuation premiums introduce heightened investment risk.
Liquidity & Solvency
Current Ratio
Latest Quarter: Q1 2026
Quick Ratio
Latest Quarter: Q1 2026
Debt-to-Equity
Latest Quarter: Q1 2026
Debt-to-Assets
Latest Quarter: Q1 2026
| Q1 2026 | Q4 2025 | Q3 2025 | Q2 2025 | Q1 2025 | Q4 2024 | Q3 2024 | Q2 2024 | |
|---|---|---|---|---|---|---|---|---|
| Liquidity Metrics | ||||||||
| Current Ratio | 0.86 | 0.87 | 0.82 | 0.78 | 0.77 | 0.79 | 0.83 | 0.81 |
| Quick Ratio | 0.53 | 0.53 | 0.52 | 0.48 | 0.45 | 0.46 | 0.51 | 0.50 |
| Solvency Metrics | ||||||||
| Debt-to-Equity | 3.11 | 3.16 | 3.07 | 2.90 | 3.10 | 2.94 | 2.91 | 3.28 |
| Debt-to-Assets | 0.52 | 0.56 | 0.52 | 0.50 | 0.52 | 0.50 | 0.50 | 0.52 |
Liquidity Assessment
Current Ratio: 0.86(Weak)
Quick Ratio: 0.53(Weak)
The company has relatively weak liquidity and may face challenges meeting short-term obligations.
Solvency Assessment
Debt-to-Equity: 3.11(High)
Debt-to-Assets: 0.52(High)
The company has relatively high debt levels, which may increase financial risk in economic downturns.
Frequently Asked Questions about SHW
AI Answers: Common Questions About SHW
Get AI-powered answers to the questions investors ask most about The Sherwin-Williams Company
SHW is not a compelling buy right now given its premium valuation (P/E 31.21), technical downtrend, and high leverage. While the fundamentals are strong and analysts see medium-term upside (median target $385), the current price ($316.82) is not a bargain and downside risk remains if support at $303.52 is broken.
There is no urgent reason to sell if you are a long-term holder, as fundamentals remain solid and the company continues to execute. However, if you are risk-averse or concerned about further technical downside, consider trimming or setting stops near key support levels.
The biggest risks are high leverage (debt/equity > 3), tight liquidity (current ratio < 1, quick ratio ~0.53), and exposure to cyclical end-markets like housing and construction. Margin compression from raw material inflation and macroeconomic downturns could further pressure earnings.
Analyst price targets cluster around $375-$400, with a median of $385. Technically, resistance is near $330 and $345, while critical support is at $303.52; a breakdown below $303 could see the stock test $300 or lower.
SHW is fairly valued at current levels: its P/E of 31.21 and high EV/EBITDA reflect a premium for quality and growth, but are justified by its market position and profitability. However, these multiples leave little margin for error if growth slows.
Fundamentally, SHW is strong: revenue grew 6.8% YoY in Q1 2026, net margin is 9.4%, and ROE is in the mid-20% range. However, the balance sheet is stretched with high leverage and low liquidity, which could become problematic in a downturn.
Technical analysis is bearish: SHW is below all major moving averages (death cross confirmed), MACD and RSI are weak, and the stock is range-bound near its 52-week lows. Key support is at $303.52, and a break below this could trigger further downside.
Key catalysts include upcoming earnings reports (with potential for beats), progress on store expansion and acquisitions (notably BASF Brazil), and macro developments in housing and raw material costs. Watch for any improvement in technical momentum or liquidity metrics.
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