Sherwin-Williams (SHW)
Materials · $85.7B market cap · SEC CIK 0000089800
ahead of 54% of the S&P 500 · #11 of 26 in Materials
Next reports on Jan 27, 2027, after the close, with analysts expecting $2.37 in earnings per share.
52-week range $289.86 to $377.77. 6% below its 52-week high and 23% above its low.
The case for SHW
- Earns 63% on shareholder equity, a figure flattered by a small equity base.
The case against
- Expensive for its growth: 33.7× mid-cycle earnings, where 6% a year of growth plus a 0.9% dividend would justify about 19×.
- Current liabilities exceed current assets (ratio 0.71).
- Long-term debt of $9.3B against $207M of cash.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Materials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 38 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 46 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 79 |
| Momentumhow the price has behaved lately | 58 |
| Stabilityhow violently it moves, what it owes and what it pays you | 66 |
- Its profits follow commodity prices, so its earnings and margin are read as half the latest year and half the average of the years on file (5), and last year's change in earnings per share is not counted as growth.
- Each factor except momentum is half fixed thresholds, half rank among the 26 Materials companies.
The financials
Revenue growth
Is the business growing? Slowly
| Last 12 months | +7.0% |
|---|---|
| Over 5 years | +5.1% a year |
| FY2025 revenue | $23.6B (+2%) |
Free cash flow
Is it generating real cash? Yes
| FY2025 free cash flow | $2.7B |
|---|---|
| Of revenue | 11% |
| Of profit | 103% |
Profit margins
Is profitability improving? Holding steady
| Gross margin | 49% |
|---|---|
| Operating margin | 14% |
| Net margin, FY24 → FY25 → now | 11.6% → 10.9% → 10.7% |
Debt vs. cash
Is the balance sheet healthy? Yes, the debt is manageable
| Cash | $207M |
|---|---|
| Long-term debt | $9.3B |
| Net debt | $9.1B |
| Years to repay | 2.7 yrs |
Valuation
Is the stock price reasonable? No, expensive
| P/E | 32.0× |
|---|---|
| P/E on mid-cycle earnings | 33.7× |
| Fair P/E for its growth | 19× |
| P/FCF | 32.3× |
| Forward P/E | 25.5× |
| EV / EBITDA | 25.0× |
Its profits follow commodity prices, so they are taken as half the latest year and half the average of recent years. At 33.7× those mid-cycle earnings (32.0× the latest year's) it trades well above the 19× that 6% a year of growth plus a 0.9% dividend would justify. At 32.3× free cash flow it trades well above that same mark.
The financials, five years deep
Pulled from Sherwin-Williams's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $23.6B | $23.1B | $23.1B | $22.1B | $19.9B |
| Change on the year | +2% | 0% | +4% | +11% | — |
| Free cash flow | |||||
| Free cash flow | $2.7B | $2.1B | $2.6B | $1.3B | $1.9B |
| Of revenue | 11% | 9% | 11% | 6% | 9% |
| Profit margins | |||||
| Gross margin | 48.8% | 48.5% | 46.7% | 42.1% | 42.8% |
| Operating margin | — | — | 18.1% | 15.3% | 15.5% |
| Net margin | 10.9% | 11.6% | 10.4% | 9.1% | 9.3% |
| Debt vs. cash | |||||
| Cash | $207M | $210M | $277M | $199M | $166M |
| Long-term debt | $9.3B | $8.2B | $8.4B | $9.6B | $8.6B |
| Net cash (debt) | −$9.1B | −$8.0B | −$8.1B | −$9.4B | −$8.4B |
What Sherwin-Williams says it does
Introduction The Sherwin-Williams Company, founded in 1866 and incorporated in Ohio in 1884, is engaged in the development, manufacture, distribution and sale of paint, coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America with additional operations in the Caribbean region, Europe, Asia and Australia. Our principal executive offices are located at 1 Sherwin Way, Cleveland, Ohio 44113-2206, telephone (216) 566-2000. As used in this report, the terms “Sherwin-Williams,” “Company,” “we”, “us” and “our” mean The Sherwin-Williams Company and its consolidated subsidiaries. Available Information We make available free of charge on or through our website our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to these reports, as soon as reasonably practicable after we electronically file such material with, or furnish…
Risk factors SHW lists in its 10-K
- Unexpected shortages and increases in the cost of raw materials and energy have in the past and may in the future adversely affect our earnings or cash flow
- Our ability to attract, retain, develop and progress a qualified global workforce could adversely impact our business and impair our ability to meet our strategic objectives and the needs of our customers
- Although we have an extensive customer base, the loss of any of our largest customers could adversely affect our sales, earnings or cash flow
- Increased competition or failure to keep pace with developments in key competitive areas of our business may reduce our sales, earnings or cash flow performance
- Policy changes affecting international trade have in the past and could in the future adversely impact the demand for our products and our competitive position
- We may not achieve our strategies or expectations relating to sustainability considerations, which could expose us to potential liabilities, increased costs, reputational harm and other adverse effects on our business
- Our business, reputation, image and brands could be damaged by negative publicity
- Our business could be adversely affected by the infringement or loss of our intellectual property rights or by the theft or unauthorized use of our trade secrets or other confidential business information
- A weakening of global credit markets or changes to our credit ratings may adversely affect our results of operations, cash flow, liquidity or financial condition
- Fluctuations in foreign currency exchange rates and changing monetary policies could adversely affect our results of operations, cash flow, liquidity or financial condition
- Increases in tax rates, or changes in tax laws or regulations, could increase our costs and could adversely affect our results of operations, cash flow or financial condition
- The nature, cost, quantity and outcome of pending and future litigation could have a material adverse effect on our results of operations, cash flow, liquidity and financial condition