SHW The Sherwin-Williams Company - Fundamental Analysis
NEUTRAL
SHW Stock | Fundamental Analysis & Investment Insights
NYSE
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Basic Materials
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Specialty Chemicals
Current Price
$332.18
Analyst Target
$386.52
+16.4% Upside
52W High
$400.42
52W Low
$308.84
AI Analysis
Powered by advanced machine learning algorithms
Confidence Score
72%
Analysis Accuracy
Sherwin-Williams (SHW) trades at a premium valuation with strong historical profitability and consistent earnings growth, supported by an elite ROE of nearly 60% and solid gross margins above 48%. However, recent earnings misses and decelerating YoY revenue growth of just 3.2% contrast with a still-elevated P/E of 32.5x and forward P/E of 26x, suggesting limited margin of safety. The stock has underperformed peers like Linde (LIN), declining 13.6% over the past year while the sector averages show better relative momentum. Analysts maintain a 'buy' rating with a $386.52 target implying ~16% upside, but insider selling over the last six months and tight liquidity ratios raise caution on near-term sentiment and financial flexibility.
Key Strengths
Exceptional ROE of 59.94% significantly outpaces sector average of 17.98%, reflecting superior capital efficiency and pricing power
Gross margin of 48.88% demonstrates strong cost control and brand pricing strength in the specialty chemicals space
Consistent double-digit EPS growth with 12.9% YoY increase and 6.2% Q/Q improvement in latest quarter
Low dividend payout ratio of 30.13% supports long-term sustainability and room for future increases
Analyst target price of $386.52 implies meaningful 16.3% upside from current levels, indicating confidence in recovery
Key Risks
Premium valuation with P/E of 32.47 vs sector avg of 28.32 and forward P/E of 25.99, leaving little room for error
Deteriorating earnings surprise trend: only 2 beats in last 4 quarters with average miss of -0.89%
High debt/equity ratio of 3.25 far exceeds peer average of 0.65, increasing interest rate and refinancing risk
Weak liquidity profile with current ratio of 0.82 and quick ratio of 0.46, below industry norms and raising working capital concerns
Negative insider activity: $2.04M in officer sales over past 6 months with zero buys, signaling lack of confidence at executive level
AI Fair Value Estimate
Based on comprehensive analysis
$386.52
+16.4% above current price
Performance Snowflake
Multi-dimensional AI analysis across 5 key categories
Stock Price & Analyst Targets
Real-time price movements and analyst price targets
Historical Performance Trends
Long-term financial metrics and growth patterns
Valuation Metrics
Key valuation ratios and pricing indicators
Profitability, Growth & Financial Health
Detailed profit margins, ROE, debt ratios, and liquidity metrics
Sector Comparison & Peer Analysis
Compare SHW against industry averages and similar companies
Insider Trading & Analyst Ratings
Track insider transactions and Wall Street analyst recommendations