بإذنك، نستخدم تحليلات محدودة تراعي الخصوصية لفهم مسارات البحث الفعالة. لا نستخدم أدوات تتبع إعلانية أو تسجيل الجلسات. يمكنك تغيير هذا الخيار في التفضيلات. اقرأ سياسة الخصوصية.
Quote this valuation with its source: Fair value, Potential value and the price at analysis.
FAQ
SHW — frequently asked questions
Is The Sherwin-Williams Company overvalued?
In our latest published analysis dated 2026-09-27, SHW looks meaningfully overvalued. The price recorded at analysis is 329 USD versus our fair value of 154 USD; the high endpoint is presented separately as potential value of 176 USD. That implies roughly 53.3% downside to fair value at that date.
Our latest published report, analyzed 2026-09-27, gives SHW a fair value of 154 USD and a potential value of 176 USD. The conclusion is triangulated across multiple valuation models and weighted by reliability for The Sherwin-Williams Company's archetype; it is a dated research output, not a live price.
Should I buy SHW now?
Our latest published rating for SHW, analyzed 2026-09-27, is Sell. The Sherwin-Williams Company looks meaningfully overvalued at the analysis-date price of 329 USD versus fair value of 154 USD; potential value is 176 USD. This is research for educational purposes, not personalized investment advice.
What are the biggest risks for SHW?
The dedicated bear-case section in our report analyzed 2026-09-27 documents The Sherwin-Williams Company's material risks, evidence, thresholds, and thesis-invalidation conditions. Scenario-specific explanations remain in that section so the report does not repeat or decontextualize them elsewhere.
What is SHW's rating?
Our latest published rating for SHW, analyzed 2026-09-27, is Sell, with a published moat assessment of 9/10 (Wide). It reflects our fair value of 154 USD, the potential value of 176 USD, and the price recorded at analysis (329 USD).
لم تتم ترجمة هذا التقرير بعد. قم بالتحديث خلال بضع دقائق بمجرد أن تلحق قائمة انتظار الترجمة بالركب.
§1 الملخص التنفيذيEN
الإجابة في 30 ثانيةSell
السعر مقابل القيمة
Price
$329.10
Fair value
$153.67
Potential value
$176.13
As of
2026-09-25
لماذا قد تنجح الفرضية
The biggest upside opportunity lies in a sharp cyclical rebound in North American residential housing turnover and commercial completions, coupled with aggressive market share gains in industrial Performance Coatings.
ما الذي سيغيّر تقييمنا
Prolonged North American housing stagnation and commercial construction freeze causing 5-year revenue CAGR to drop below 1.5%.
We assign a Sell rating to The Sherwin-Williams Company as its report-date price of $329.10 on September 25, 2026 trades at an unsustainable 114.2% premium over our Fair value of $153.67.4
Our house rating on Sherwin-Williams is Sell. For an individual investor, this rating indicates that the current equity valuation is disconnected from underlying fundamentals, creating severe asymmetric downside risk where capital is best preserved by exiting existing positions or avoiding new capital allocations.
The report was prepared at a price of $329.10 on September 25, 2026. This report-date price stands substantially above our Fair value of $153.67, representing an upside of -53.31%. Furthermore, even when evaluated against our Potential value of $176.13, which represents the high end of our valuation range under accelerated commercial share gains, the stock trades at an extended 86.9% premium.
The main risk that could challenge our Sell rating is a sharp, unexpected cyclical rebound in North American residential housing turnover and commercial repainting activity. If existing-home sales and residential completions accelerate well beyond current expectations, architectural paint volume across the store network would expand significantly above management's low-single-digit guidance. Investors would observe Paint Stores Group same-store sales accelerating into high single digits alongside robust operating margin expansion toward 17.5% through fixed-store operating leverage, lifting intrinsic valuation toward our Potential value of $176.13.5
Sherwin-Williams builds intrinsic value through its captive Paint Stores Group, which generated $13,605.9M in FY2025 revenue. Controlling more than 5,000 company-operated stores enables direct trade credit, job-site delivery, and precise custom tinting that lock in professional painting contractors who prioritize speed and reliability over paint price. This distribution moat generates consolidated gross margins of 48.85% and $3,451.6M in annual operating cash flow. However, because this earnings power is already fully recognized in our Fair value of $153.67, these operational strengths cannot support the prevailing market price of $329.10.4,5,7,8
Captive retail store distribution network (Paint Stores Group)
Paint Stores Group operates an exclusive, company-owned retail store network that generated $13,605.9M in FY2025, accounting for 57.7% of consolidated net sales. Direct control over distribution locks in commercial painting contractors through job-site delivery, custom trade credit terms, contractor bidding and management tools (ProPlus), and consistent color matching, creating substantial switching barriers that wholesale chemical suppliers and big-box retailers cannot replicate.7,8
Brand equity and proprietary product formulations
Decades of brand leadership and technical coating formulation enable premium price realization across architectural lines, as demonstrated by the rollout of high-end lines such as Emerald Symmetry. Strong brand equity supports regular price increases, including the September architectural price increase, allowing consolidated gross margins to hold at 48.85%.5,7
Localized blending facility network and turnaround speed advantage
The Performance Coatings Group generated $6,821.8M in FY2025. Its localized blending facilities are located in close physical proximity to industrial manufacturing clients, allowing rapid custom batch reformulation and delivery within days or weeks versus competitor lead times of months, securing premium price realization and high retention in general finishing and heavy equipment construction.5,8
توصية الدار
We rate Sherwin-Williams a Sell because the market price of $329.10 incorporates overly aggressive long-term earnings growth expectations that stand far above the company's intrinsic Fair value of $153.67.4
نظرة عامة على الشركة
The Company offers product warranties for certain products. The specific terms and conditions of such warranties vary depending on the product or customer contract requirements.
Management estimated the costs of unsettled product warranty claims based on historical results and experience and included an amount in Other accruals. The Company offers assurance-type product warranties for certain products.
§2 السيناريو الهبوطيEN
A severe joint stress test models a confluence of macro and micro headwinds: persistent North American housing stagnation depressing existing-home turnover and architectural repaint volumes, compounding raw material cost inflation across petrochemical resins, monomers, and titanium dioxide, and refinancing hurdles on $15,031.7M in total debt. In this scenario, Paint Stores Group volume contracts as commercial painters face delayed project starts and tight contractor credit, while DIY retail demand remains subdued. Concurrently, input cost increases cannot be fully offset due to competitive price elasticity, compressing consolidated operating margins from 16.15% toward 13.50%. Fixed operating leverage inherent in maintaining over 5,000 captive retail stores magnifies top-line deceleration, reducing operating cash flow conversion. Under higher debt refinancing costs at an elevated pre-tax cost of debt of 5.83% and a strict cost of equity of 9.74%, discretionary capital return through share repurchases ceases, and market multiples contract toward industrial peer levels of 17.0x-18.0x P/E, driving intrinsic equity value substantially below current trading levels.
Petrochemical and titanium dioxide inflation severely compresses gross and operating margins.
كيف يمكن أن تفشل هذه الأطروحة
Prolonged North American housing stagnation and commercial construction freeze.
Paint Stores Group revenue of $13,605.9M depends on residential turnover and completions, which face ongoing softness. An extended freeze triggers top-line deceleration 5 percentage points below forecast.5,8
FV impact
-3.7%
Revenue and EPS growth 5 points lower for five years
Trigger
Within 24 months
إشارات الإنذار المبكر للمراقبة
التطورات الخمسة التي قد تضعف أطروحتنا الاستثمارية.
Sherwin-Williams commands an elite Wide economic moat anchored by its fully integrated downstream retail distribution model. Unlike traditional chemical and specialty materials peers that rely on independent distributors, wholesale channels, or big-box retailers, Sherwin-Williams distributes the majority of its architectural coatings through more than 5,000 company-operated stores in the Paint Stores Group. In FY2025, Paint Stores Group generated $13,605.9M in revenue, representing 57.7% of total consolidated sales of $23,574.3M. This captive footprint creates high switching costs for professional painting contractors who depend on store proximity, early morning opening hours, dedicated job-site delivery, specialized trade credit, and customized digital bidding tools via the ProPlus platform. Contractors develop operational routines centered on specific store branches, making supplier substitution costly in terms of project scheduling and color tinting precision.
The company's competitive advantage extends into industrial specialty coatings through its Performance Coatings Group, which produced $6,821.8M in net sales in FY2025. In industrial coatings, turnaround speed and batch agility serve as critical customer retention drivers. Operating a decentralized network of regional blending facilities located close to customer assembly plants enables Sherwin-Williams to reformulate and deliver custom batches in days or weeks, whereas larger centralized competitors often require several months. This agility converts potential logistical supply bottlenecks into durable switching barriers, enabling surgical pricing implementation and share gains across general industrial, coil, and heavy equipment markets.
These structural advantages generate industry-leading economic profit spreads. Sherwin-Williams delivers an ROIC of 19.87%, substantially exceeding its computed WACC of 8.7545% and moderate cost of equity of 9.5556%. In contrast to wholesale specialty chemical peers such as Air Products & Chemicals (APD), which generates a gross margin of 32.06%, Sherwin-Williams achieved a consolidated gross margin of 48.85% ($11,515.5M gross profit), capturing both manufacturing and retail markups. Furthermore, operating cash flow conversion is exceptional at $3,451.6M relative to net income of $2,568.5M. The captive network's high customer retention and ongoing store additions—with 80 to 100 net new stores planned annually beginning next year —ensure that the moat remains robust across the 10-year stage I horizon.
الربح الاقتصادي
Sherwin-Williams generates an ROIC of 19.87%, substantially exceeding its computed WACC of 8.7545% and moderate cost of equity of 9.5556% by over 1,000 basis points. This substantial spread demonstrates wide-moat economic value creation sustained by captive distribution pricing power and premium product formulation, generating $11,515.5M in gross profit (48.85% gross margin) on $23,574.3M net sales.2,7
9/ 10
Wide
Sources of advantage
01Captive retail store distribution network (Paint Stores Group) — Paint Stores Group operates an exclusive, company-owned retail store network that generated $13,605.9M in FY2025, accounting for 57.7% of consolidated net sales. Direct control over distribution locks in commercial painting contractors through job-site delivery, custom trade credit terms, contractor bidding and management tools (ProPlus), and consistent color matching, creating substantial switching barriers that wholesale chemical suppliers and big-box retailers cannot replicate.Wide
02Brand equity and proprietary product formulations — Decades of brand leadership and technical coating formulation enable premium price realization across architectural lines, as demonstrated by the rollout of high-end lines such as Emerald Symmetry. Strong brand equity supports regular price increases, including the September architectural price increase, allowing consolidated gross margins to hold at 48.85%.Wide
التهديدات المعروفة للميزة التنافسية
التهديد
الخطورة
الجدول الزمني
التخفيف
Prolonged stagnation in North American existing-home sales and residential construction completions depressing architectural volume demand.
high
12-24 months
Focusing on commercial repaint, property maintenance contracts, active account wallet expansion, and adding 80 to 100 net new stores beginning next year to outperform overall market completions by 1.5x to 2x.5
الصفوف: معدل الخصم (Ke للأرباح؛ WACC للتدفقات النقدية). الأعمدة: النمو النهائي.
القيمة العادلة
تغير المدة (سنوات)
-5
-2
0
+2
+5
القيمة العادلة
155.06 US$
154.18 US$
153.67 US$
153.21 US$
152.60 US$
مدة الميزة التنافسية: 10 سنوات في الحالة الأساسية المميزة. تبقى الافتراضات الأخرى ثابتة.
مرجع الحساسية
The highlighted cell is Fair value when every assumption sits at its base level ($153.67). Each row and column shows what Fair value becomes when one assumption moves.
منحدر التدفق النقدي الحر
Free cash flow to the firm stays positive in the first projected year at $2.4B after modeled reinvestment of $790.2M, with terminal value at 76.6% of enterprise value. A sudden drop in free cash flow is not projected unless capital spending relative to revenue, reinvestment, or gross margin resets materially.
Under the base path, Sherwin-Williams maintains steady volume growth across its captive store network, capitalizing on commercial contractor loyalty to outpace broader residential construction completions. While operational execution remains solid, the target price of $153.67 at a 55.0% probability implies a -53.3% return from the share price at $329.10 (as of 2026-09-25), reflecting significant market multiple compression toward Fair value $153.67.
Vigorous rebound in existing home turnover and residential completions driving accelerated repaint demand.
Rapid market share gains in industrial coatings powered by local blending speed advantages.
Operating margin expands toward new peaks on strong and raw material deflation.
§7 شجرة قرارات الأرباحEN
تجاوز
Maintain Sell; Maintain disciplined exposure; verify whether volume acceleration stems from market share gains rather than temporary channel inventory restocking.
المُحفِّز: Consolidated revenue growth accelerating above guided mid-to-high single digits alongside sequential gross margin expansion and store volume growth exceeding peer market rates.
Even with operational upside, the share price at $329.10 trades at a substantial premium to Fair value $153.67, meaning fundamental beats are already fully priced into the shares.
متوافق
Maintain Sell; Re-examine contractor order patterns and monitor whether September price increases achieve full realization without volume concessions.
المُحفِّز: Financial performance meeting guided revenue growth and earnings targets, with steady contractor store foot traffic and stable raw material inflation realization.
Meeting base expectations leaves the stock vulnerable to valuation multiple compression, as the price at $329.10 exceeds Fair value $153.67.
دون التوقعات
Maintain Sell; Execute position liquidation and avoid capital allocation until market valuation reflects underlying cyclical demand reality.
المُحفِّز: Store volume turning negative, gross margin compressing due to unrecovered raw material feedstock inflation, or contractor credit defaults rising.
Operational misses would accelerate valuation multiple compression toward cyclical peers as market participants reassess premium valuation against elevated debt levels.
جودة الأرباح
Earnings quality is supported by healthy cash conversion where operating cash flow exceeds net income. Working capital management remains disciplined with inventory levels controlled relative to seasonal contractor demand. However, operating earnings durability faces headwinds from rising raw material feedstock costs and the lag in realizing architectural price adjustments across customer contracts.
المقاييس التي يجب مراقبتها قبل الإعلان
01
المقياس:
Paint Stores Group volume growth
الحاليGuiding to low-single-digit volume expansion supported by active account growth and contractor loyalty tools.
Operating cash flow was robust at $3,451.6M in FY2025, delivering an exceptional 1.34x conversion ratio relative to GAAP net income of $2,568.5M. Free cash flow reached $2,654.0M after deducting capital expenditures of $797.6M. Cash flow conversion benefits from tight working capital discipline and high inventory turns across the captive store network, although second-half working capital demands typically rise during peak exterior painting season and inventory pre-builds ahead of raw material cost inflation.6,7
تخصيص رأس المال
Sherwin-Williams' capital allocation strategy balances network expansion, maintenance reinvestment, dividend payments, and debt obligations. in FY2025 was $797.6M (3.38% of net sales), with normalized estimated at 80% ($638.1M) to support existing store fleet and blending facilities, while growth funds 80 to 100 net new store openings annually. Dividends totaled $3.20 per share, while discretionary share repurchases deploy excess . However, total balance-sheet debt of $15,031.7M under a pre-tax of 5.83% will require dedicated debt service and refinancing allocations over the 2027-2029 maturity window, moderating velocity.
Sherwin-Williams generates an ROIC of 19.87%, demonstrating superior capital efficiency. The company's high ROIC is sustained by the high sales density of its captive retail stores, strong brand pricing power that preserves 48.85% gross margins, and rapid working capital turnover. Over the past decade, operating margins have demonstrated resilience, averaging over 16.0% despite intermittent raw material shocks.
ROIC of 19.87% substantially exceeds the computed WACC of 8.7545% by 1,112 basis points, and exceeds the moderate cost of equity of 9.5556% by 1,031 basis points, verifying exceptional economic value creation.
Captive retail store integration generates premium far exceeding specialty chemical peer averages.
أحدث إيرادات23.6 مليار US$معدل النمو السنوي المركب للإيرادات +7.9%
هامش التشغيل16.1%10 فترات مالية
أحدث تدفق نقدي حر2.7 مليار US$FY2025
صافي الدين9.5 مليار US$FY2025
تفصيل قائمة الدخلكيف يتحول حجم الأعمال إلى أرباح مُعلنة.30 يونيو 2026
StockMarketAgent.AI
الإيرادات6.8 مليار US$تكلفة الإيرادات−3.5 مليار US$إجمالي الربح3.3 مليار US$المصروفات التشغيلية−2.1 مليار US$الدخل التشغيلي1.2 مليار US$البنود غير التشغيلية والضرائب−387.3 مليون US$صافي الدخل843.6 مليون US$
بيانات التاريخ المالي
الإيرادات
6,789,300,000 US$
تكلفة الإيرادات
3,451,300,000 US$
إجمالي الربح
3,338,000,000 US$
المصروفات التشغيلية
2,107,100,000 US$
الدخل التشغيلي
1,230,900,000 US$
البنود غير التشغيلية والضرائب
-387,300,000 US$
صافي الدخل
843,600,000 US$
لمحة عن الميزانية العموميةكيفية الاحتفاظ بالأصول المُبلغ عنها وتمويلها في الفترة المحددة.
StockMarketAgent.AI
تكوين الأصولمصادر التمويل
إجمالي الأصول25.9 مليار US$النقد207.2 مليون US$الأصول المتداولة6 مليار US$إجمالي الالتزامات21.3 مليار US$الالتزامات المتداولة6.9 مليار US$حقوق المساهمين4.6 مليار US$
بيانات تفصيل الميزانية العمومية
إجمالي الأصول
25,901,700,000 US$
النقد
207,200,000 US$
الأصول المتداولة
6,007,400,000 US$
إجمالي الالتزامات
21,303,400,000 US$
الالتزامات المتداولة
6,920,300,000 US$
حقوق المساهمين
4,598,300,000 US$
جسر التدفق النقديكيف تحول التدفق النقدي التشغيلي إلى تدفق نقدي حر في FY2025.
StockMarketAgent.AI
تسوية التدفق النقدي التشغيلي
صافي الدخل2.6 مليار US$الإهلاك والإطفاء+676.9 مليون US$التعويض القائم على الأسهم+123.5 مليون US$تعديلات تشغيلية أخرى+82.7 مليون US$التدفق النقدي التشغيلي3.5 مليار US$
تسوية النقد من بداية الفترة إلى نهايتها
النقد في بداية الفترة210.4 مليون US$التدفق النقدي التشغيلي+3.5 مليار US$التدفق النقدي الاستثماري−2.1 مليار US$التدفق النقدي التمويلي−1.4 مليار US$تأثير سعر الصرف−9.9 مليون US$النقد في نهاية الفترة207.2 مليون US$
3.5 مليار US$ − 797.6 مليون US$التدفق النقدي الحر 2.7 مليار US$
بيانات جسر التدفق النقدي
صافي الدخل
2,568,500,000 US$
التدفق النقدي التشغيلي الداخل
3,451,600,000 US$
الإهلاك والإطفاء
676,900,000 US$
التعويض القائم على الأسهم
123,500,000 US$
تعديلات تشغيلية أخرى
82,700,000 US$
التدفق النقدي التشغيلي
3,451,600,000 US$
النقد المتاح
3,662,000,000 US$
النقد في بداية الفترة
210,400,000 US$
التدفق الاستثماري الخارج
2,066,300,000 US$
النفقات الرأسمالية
797,600,000 US$
أنشطة استثمارية أخرى
1,268,700,000 US$
التدفق التمويلي الخارج
1,378,600,000 US$
تأثير سعر الصرف
9,900,000 US$
النقد في نهاية الفترة
207,200,000 US$
التدفق النقدي الاستثماري
-2,066,300,000 US$
التدفق النقدي التمويلي
-1,378,600,000 US$
الإيرادات حسب فئة الأعمالالحصة من إجمالي إيرادات 2026-06-30.
6.8 مليارإجمالي الإيرادات
الإيرادات حسب فئة الأعمالالحصة
Cost of3.5 مليار50.8%
أخرى3.3 مليار49.2%
بيانات توزيع الإيرادات: الإيرادات حسب فئة الأعمال
الإيرادات حسب فئة الأعمال
الإيرادات
الحصة
على أساس سنوي
Cost of
3.5 مليار
50.8%
—
Other
3.3 مليار
49.2%
—
الإيرادات والأرباحكيف يتحول حجم الأعمال إلى أرباح مُعلنة.
النقد والدينالسيولة المتاحة مقارنة بإجمالي الاقتراض.
توليد النقدالتدفق النقدي التشغيلي مقارنة بالتدفق النقدي الحر.
The Sherwin-Williams Company (SHW) trades at 23.8x forward earnings against a peer median of 21.8x. Its EV/EBITDA of 20.0x compares with a peer median of 17.6x. The comparison uses 4 peers: Linde plc, Ecolab Inc., Air Products and Chemicals Inc. and Freeport-McMoRan Inc., as of 2026-09-27.
§10 الصناعة والدورةEN
مرحلة الدورة
Contraction
The specialty materials industry exhibits a capex-to-depreciation ratio of 1.55x and capex-to-revenue ratio of 4.10%. Sherwin-Williams maintains disciplined capital additions with FY2025 capex of $797.6M on revenue of $23,574.3M (3.38% of sales), alongside depreciation of $676.9M (capex/depreciation of 1.18x). Broader chemical industry capex indicates late-cycle capacity expansion, while architectural coatings demand faces demand-led cyclical contraction.7
دورة صعودية
A bull cycle is characterized by accelerating residential real estate turnover, lower mortgage rates spurring existing-home sales and remodel activity, robust non-residential commercial building maintenance, and expansion in industrial manufacturing. In this environment, paint gallon volume demand expands strongly, allowing coatings manufacturers to achieve operating leverage across captive retail store networks, push through positive price/mix realization, and expand operating margins.
دورة هبوطية
A bear cycle in architectural and industrial coatings is triggered by prolonged high mortgage interest rates that lock homeowners in place, causing North American existing-home sales and residential remodel turnover to stagnate. Under this regime, commercial project completions slow, DIY demand weakens, and industrial original equipment manufacturing contracts. Concurrently, petrochemical supply shocks drive up input costs for resins, monomers, and pigments, resulting in margin contraction as fixed retail store operating expenses deleverage.
الاتجاهات طويلة الأمد
الاتجاه
التأثير
ملاحظة
Aging United States housing stock driving non-discretionary architectural repaint demand
positive
The median age of owner-occupied housing units in the United States exceeds 40 years, necessitating regular exterior and interior architectural repaint maintenance cycles regardless of new construction velocity, creating durable baseline gallon demand.
Professional painter market share expansion over consumer DIY paint application
positive
Commercial and residential property owners increasingly hire professional painting contractors rather than undertaking do-it-yourself painting, shifting volume toward dedicated commercial paint stores that cater to professional contractors with custom tinting, credit, and delivery.
التموضع
Sherwin-Williams is positioned at the pinnacle of the architectural coatings industry in North America through its captive network of over 5,000 Paint Stores, insulating the company from upstream chemical commodity swings and downstream big-box retailer margin squeeze. By controlling retail distribution directly, Sherwin-Williams captures both manufacturing and retail distribution margins, allowing it to sustain 48.85% gross margins and outperform underlying market demand by 1.5x to 2x. In industrial coatings, localized blending infrastructure provides unmatched speed, positioning the firm to take share from larger, slower competitors during industrial demand recovery.5,7
§11 إدارة المراكزEN
حجم المركز
0%
With the investment committee establishing a Sell rating and the share price trading at a 114.2% premium to synthesized Fair value of $153.67 relative to the analysis price of $329.10, zero capital allocation is recommended.4
المخاطر
Risk management requires immediate capital preservation. Sherwin-Williams is an exceptionally well-run business with a Wide economic moat, but its current market valuation prices in unattainable perpetual growth and multiple permanence. Investors should eliminate equity exposure and avoid dip-buying until the market multiple reconciles with cyclical reality.
شرائح الدخول
المستوى
إجراء
لماذا
Above Potential value ceiling of $176.13
Avoid / Do not accumulate
The stock trades at an extreme premium to fair value; purchasing shares above the potential value ceiling exposes capital to severe multiple contraction risk.
Near Fair value midpoint of $153.67
Re-evaluate fundamental risk
A pullback to synthesized Fair value of $153.67 would eliminate the market premium and warrant fresh evaluation of the cyclical growth trajectory.
Confirm structural impairment of the captive retail distribution moat and reduce terminal earnings expectations.
§12 وجهات نظر المستثمرينEN
Value Investor
Avoid
Trading at a 114.2% premium to our Fair value of $153.67 and a forward P/E of 23.75x, the stock offers negative margin of safety and significant downside risk.4
Growth Investor
Avoid
Even assuming consensus FY2027 diluted EPS of $13.60, the implied 10-year EPS growth hurdle embedded in the $329.10 share price is 12.83% annually, which is nearly 10 percentage points above historical revenue growth of 2.10%.1,4
Income Investor
Avoid
A low current dividend payout of $3.20 per share yields less than 1.0% on the report-date price of $329.10, while total debt of $15.03B requires debt service prioritization over dividend acceleration.4
§14 التوصية النهائيةEN
إجراء
بيع
Sell existing positions and avoid initiating new capital commitments in Sherwin-Williams. At the report-date price of $329.10 on September 25, 2026, the equity trades at an extreme 114.2% premium over our Fair value of $153.67, offering an upside of -53.31%.4
While Sherwin-Williams possesses an exceptional competitive moat anchored by its captive Paint Stores Group and achieves a superior 19.87% ROIC, current market pricing discounts unrealistically aggressive long-term compound growth that leaves zero margin of safety against cyclical housing slowdowns or raw material inflation headwinds.
§15ملاحظاتك
دوّن أطروحتك الاستثمارية وحجم مركزك وأسئلة المتابعة. تبقى على هذا الجهاز، ولا يراها أحد سواك.
ملاحظات خاصة
مرئية لك وحدك. محفوظة على هذا الجهاز.
لا أحرف
Sources
The records this analysis drew on, as they stood when it was run.
Analyst consensusData as of 2026-09-27 · Published 2026-09-27 · Provider-adjusted · cited for 1 figureCited in وجهات نظر المستثمرين
Not every cited input appears here: internal calculations and intermediate model outputs have no external record, and some citations could not be matched to one.
Valuation multiples re-rate lower toward cyclical chemical peers under elevated debt refinancing burdens.
The downside scenario reflects a prolonged stagnation in North American residential real estate turnover combined with rising petrochemical input costs that cannot be fully offset through contractor pricing. High debt levels and operating deleverage across the captive store network contract profitability, causing market multiples to compress toward specialty chemical peer levels.
Persistent petrochemical and titanium dioxide inflation squeeze with contractor pricing pushback.
Operating margins dropped to 14.89% in 2018. With management raising inflation outlook and price hikes delayed to September, input cost spikes reduce operating margin by 300 bps below the 16.15% current level.4,5
FV impact
-3.2%
Operating margin 3 points lower throughout
Trigger
Within 12 months
Multiple re-rating toward cyclical industrial chemical peer multiples due to high debt burden.
Peers with significant industrial exposure trade at 17.46x (FCX) and 19.52x (APD). High debt of $15,031.7M and moderating growth compress SHW's terminal multiple by 20% from the assumed 21.0x.4
FV impact
-2.5%
Terminal multiple 20% lower
Trigger
Within 18 months
Higher-for-longer interest rate regime and rising credit spread increasing cost of capital.
Severe erosion of the economic profit spread above WACC of 8.7545% and moderate Ke of 9.5556%, signaling structural moat decay.
الحالي:19.87% in FY2025
تنبيه إذاBelow 12.00% in any trailing 12-month period
03
Localized blending facility network and turnaround speed advantage — The Performance Coatings Group generated $6,821.8M in FY2025. Its localized blending facilities are located in close physical proximity to industrial manufacturing clients, allowing rapid custom batch reformulation and delivery within days or weeks versus competitor lead times of months, securing premium price realization and high retention in general finishing and heavy equipment construction.
Moderate
Petrochemical monomer, resin, solvent, and titanium dioxide raw material cost spikes eroding gross profit margins.
medium
6-12 months
Demonstrated pricing power through disciplined price hikes, including the September architectural increase and surgical industrial contract indexing.5
Big-box home improvement retailers expanding pro-contractor discount programs and exclusive private-label architectural coatings.
low
24-36 months
Maintaining strategic partnerships with select big-box retailers (Lowe's, Menards) for dedicated consumer lines while focusing core capital investments on proprietary store contractor services.5
In the bull path, a sharp recovery in North American housing turnover drives surging architectural repaint demand, while the Performance Coatings Group accelerates industrial account wins through rapid local blending batch delivery. Supported by expanding operating margins and accelerated capital returns, the target price reaches $176.13 with a 20.0% probability, yielding a -46.5% return compared to the share price at $329.10 (as of 2026-09-25).
Directly determines gross margin trajectory and tests whether pricing increases can offset higher formulation costs.
03
المقياس:
Realization glide path of architectural price hikes
الحاليArchitectural price increases implemented in September with realization expected to extend across upcoming quarters.
لماذا يهم
Price realization protects operating profit margins and reveals contractor price tolerance during housing market turnover softness.
04
المقياس:
Performance Coatings Group order turnaround and new account wins
الحاليGrowth in general finishing and heavy equipment construction offsetting core erosion in transportation and energy end-markets.
لماذا يهم
Demonstrates industrial moat strength by converting rapid delivery and color matching into premium pricing and market share.
Paint Stores Group delivered $13,605.9M in revenue (57.7% of total sales), supporting consolidated gross profit of $11,515.5M (48.85% gross margin).
Direct retail distribution captures retail markup that chemical peers concede to third-party distributors, insulating consolidated profitability from commodity cost swings.
Operating cash flow of $3,451.6M exceeded net income of $2,568.5M by $883.1M in FY2025, yielding a conversion rate of 134.4%.
High-quality cash generation fully funds annual capex requirements of $797.6M and sustains discretionary capital returns across economic cycles.
Substantial leverage creates refinancing headwinds that limit financial flexibility.
Total debt of $15,031.7M as of September 27, 2026 carries a pre-tax cost of debt of 5.83% with debt weighting at 15.84%.
Refinancing upcoming debt maturities in a higher-for-longer rate environment will increase annual interest expense, capping equity multiple expansion relative to chemical peers.
Air Products and Chemicals, Inc.APD
السعر / القيمة العادلة
القيمة العادلة251.01 US$Report-date price273.33 US$
تاريخ التقييم
الميزة التنافسيةNarrow
بطاقة تقييم الاستثمار49 / 100
Freeport-McMoRan Inc.FCX
السعر / القيمة العادلة
القيمة العادلة32.53 US$Report-date price72.31 US$
تاريخ التقييم
الميزة التنافسيةNarrow
بطاقة تقييم الاستثمار59 / 100
الهامش
SHW
The Sherwin-Williams Company
$79.9B
23.8x
3.3x
20.0x
65.1%
—
LIN
Linde plc
$216.6B
24.0x
6.1x
17.5x
18.4%
28.1%
ECL
Ecolab Inc.
$78.3B
29.7x
4.7x
21.1x
22.0%
18.5%
APD
Air Products and Chemicals Inc.
$62.7B
19.5x
5.0x
17.8x
0.0%
25.5%
FCX
Freeport-McMoRan Inc.
$103.8B
17.5x
4.0x
12.8x
14.8%
33.4%
Regulatory transition toward low-VOC and sustainable waterborne chemical formulations
positive
Tightening environmental regulations regarding volatile organic compounds (VOCs) and chemical solvents favor large-scale formulators with extensive R&D capabilities capable of engineering compliant, high-durability waterborne coatings.
