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1. Company Snapshot

1.a. Company Description

The Sherwin-Williams Company develops, manufactures, distributes, and sells paints, coatings, and related products to professional, industrial, commercial, and retail customers.It operates through three segments: The Americas Group, Consumer Brands Group, and Performance Coatings Group.The Americas Group segment offers architectural paints and coatings, and protective and marine products, as well as OEM product finishes and related products for architectural and industrial paint contractors, and do-it-yourself homeowners.


The Consumer Brands Group segment supplies a portfolio of branded and private-label architectural paints, stains, varnishes, industrial products, wood finishes products, wood preservatives, applicators, corrosion inhibitors, aerosols, caulks, and adhesives to retailers and distributors.The Performance Coatings Group segment develops and sells industrial coatings for wood finishing and general industrial applications, automotive refinish products, protective and marine coatings, coil coatings, packaging coatings, and performance-based resins and colorants.It serves retailers, dealers, jobbers, licensees, and other third-party distributors through its branches and direct sales staff, as well as through outside sales representatives.


The company has operations primarily in the North and South America, the Caribbean, Europe, Asia, and Australia.As of February 17, 2022, it operated approximately 5,000 company-operated stores and facilities.The Sherwin-Williams Company was founded in 1866 and is headquartered in Cleveland, Ohio.

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1.b. Last Insights on SHW

The Sherwin-Williams Company's recent performance was negatively impacted by soft end-market demand and uneven demand across channels. Despite this, the company posted solid Q3 '25 results, with sales up 3.2% and net income rising 3.3%. The Paint Stores Group showed resilience, but Consumer Brands and Performance Coatings segments faced challenges. Additionally, the company's decision to slash its 401(k) match has raised concerns about employee morale. With a premium 26x forward P/E, the company relies on optimistic 2026 EPS growth projections, which may be difficult to achieve given real estate headwinds.

1.c. Company Highlights

2. Sherwin-Williams' Strong Q4 Results Driven by Core Performance and Suvenil Acquisition

Sherwin-Williams ended 2025 with a strong fourth quarter, driven by solid core performance and the first full quarter of the Suvenil acquisition. Consolidated sales increased by a mid-single-digit percentage, with a low single-digit contribution from Suvenil. Adjusted diluted net income per share in the quarter increased by 6.7% to $2.23, beating analyst estimates of $2.16, and adjusted EBITDA grew 13.4% to 17.7% as a percent of sales. For the full year, the company delivered record consolidated sales and record adjusted diluted earnings per share.

Publication Date: Feb -02

📋 Highlights
  • Q4 Adjusted EBITDA Growth:: Surged 13.4% to 17.7% as a percent of sales, driven by Suvenil integration and core performance.
  • Full-Year Free Cash Flow:: Hit $2.7 billion with 59% conversion rate, supporting $2.5 billion in shareholder returns via buybacks and dividends.
  • 2026 Sales Guidance:: Projected low to mid-single-digit consolidated sales growth, with $11.50–$11.90 adjusted EPS (2.4% increase at midpoint).
  • Suvenil Acquisition Impact:: Contributed low single-digit sales growth in Q4, with integration costs affecting 2024 margins before recovery.
  • Price Mix Tailwind:: 7% January 1 price hike expected to drive low single-digit positive price mix in 2026 across all segments.

Financial Performance and Guidance

Net operating cash grew 9.4% to $3.5 billion, and free cash flow was $2.7 billion, with a free cash flow conversion of 59%. The company returned $2.5 billion to shareholders through share repurchases and dividend payments, marking the 47th consecutive year of dividend increases. For 2026, the company expects a low to mid-single-digit increase in consolidated sales and diluted net income per share in the range of $10.70 to $11.10 per share.

Segment Performance

In the performance coatings segment, margin outperformance was driven by discipline on display, with a focus on new business wins, market share, and cost control. The company has essentially recovered from temporary share loss in the packaging coatings segment and continues to win with leading technology. The European Food Safety Association ban on BPA will drive more customer conversions.

Valuation and Outlook

With a P/E Ratio of 34.02 and an EV/EBITDA of 22.77, the company's valuation suggests that investors have high expectations for its future growth. The company's ROIC of 15.21% and ROE of 58.53% indicate strong profitability. Analysts estimate next year's revenue growth at 4.5%, which is slightly higher than the company's guidance. The company's focus on organic growth, cost control, and innovation positions it well for future success.

Operational Highlights

The company plans to open 80 to 100 net new stores in the US and Canada and recommends a 1.3% increase in the annual dividend to $3.20 per share. The Paint Stores Group is expected to perform flat with the market down, but the company is investing in innovation, including a new zero VOC paint launch. The company brought back its 401(k) match, citing a desire to protect jobs and maintain long-term health, despite choppy macro indicators.

3. NewsRoom

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Mediolanum International Funds Ltd Sells 8,499 Shares of The Sherwin-Williams Company $SHW

Feb -01

Source: defenseworld.net

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Sherwin-Williams Co (SHW) Q4 2025 Earnings Call Highlights: Record Sales and Strategic Growth Amid Challenges

Jan -29

Source: gurufocus.com

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The Sherwin-Williams Company (SHW) Q4 2025 Earnings Call Transcript

Jan -29

Source: seekingalpha.com

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Sherwin-Williams' Q4 Earnings and Revenues Surpass Estimates

Jan -29

Source: zacks.com

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Sherwin-Williams (SHW) Q4 Earnings: Taking a Look at Key Metrics Versus Estimates

Jan -29

Source: zacks.com

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Sherwin-Williams (SHW) Beats Q4 Earnings and Revenue Estimates

Jan -29

Source: zacks.com

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The Sherwin-Williams Company Reports 2025 Year-End and Fourth Quarter Financial Results

Jan -29

Source: prnewswire.com

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Compass Wealth Management LLC Purchases Shares of 6,099 The Sherwin-Williams Company $SHW

Jan -27

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.59%)

6. Segments

Paint Stores Group (Incl. Latin America Coatings Group)

Expected Growth: 4.5%

Increasing demand for decorative paints and coatings driven by urbanization, rising middle-class population, and growth in the construction industry, particularly in Latin America, where Sherwin-Williams' Latin America Coatings Group has a strong presence.

Consumer Brands Group

Expected Growth: 4.5%

Growing demand for DIY projects and renovation activities, coupled with the Sherwin-Williams Company's expanding product portfolio and strong distribution network, drives growth in the paints and coatings segment.

Performance Coatings Group

Expected Growth: 4.5%

Growing demand for eco-friendly coatings and increasing automotive production drive growth for Sherwin-Williams' coatings segment.

Unallocated Administrative

Expected Growth: 4.1%

Sherwin-Williams' unallocated administrative expenses are driven by increasing raw material costs, rising wages, and strategic investments in digital capabilities, which are expected to support long-term growth.

7. Detailed Products

Architectural Coatings

A wide range of paints, coatings, and stains for residential and commercial buildings, including interior and exterior paints, primers, and specialty coatings.

Industrial Coatings

Specialized coatings for industrial applications, including protective coatings, powder coatings, and coil coatings.

Automotive Finishes

High-performance coatings for the automotive industry, including refinish coatings, collision repair coatings, and OEM coatings.

Marine Coatings

Specialized coatings for the marine industry, including antifouling coatings, epoxy coatings, and polyurethane coatings.

Aerospace Coatings

High-performance coatings for the aerospace industry, including coatings for aircraft, spacecraft, and missiles.

Product Finishes

Specialized coatings for the product finishing industry, including coatings for furniture, appliances, and other manufactured goods.

Resinous Flooring

Epoxy, polyurethane, and acrylic flooring systems for industrial, commercial, and institutional facilities.

Powder Coatings

Environmentally friendly, powder-based coatings for a wide range of applications, including furniture, appliances, and architectural metal.

8. The Sherwin-Williams Company's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for The Sherwin-Williams Company is medium due to the presence of alternative products and services in the market. While the company has a strong brand presence, customers may still opt for substitutes such as DIY painting or other decorative products.

Bargaining Power Of Customers

The bargaining power of customers for The Sherwin-Williams Company is low due to the company's strong brand presence and wide distribution network. Customers have limited bargaining power as they are dependent on the company's products and services.

Bargaining Power Of Suppliers

The bargaining power of suppliers for The Sherwin-Williams Company is medium due to the presence of multiple suppliers in the market. While the company has some bargaining power, suppliers also have some leverage due to the importance of their products in the company's operations.

Threat Of New Entrants

The threat of new entrants for The Sherwin-Williams Company is low due to the high barriers to entry in the market. New entrants would need significant resources and investment to compete with the company's established brand and distribution network.

Intensity Of Rivalry

The intensity of rivalry for The Sherwin-Williams Company is high due to the presence of several established competitors in the market. The company faces intense competition from other paint and coatings manufacturers, which drives innovation and pricing strategies.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 73.49%
Debt Cost 4.60%
Equity Weight 26.51%
Equity Cost 9.84%
WACC 5.99%
Leverage 277.20%

11. Quality Control: The Sherwin-Williams Company passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Ecolab

A-Score: 5.2/10

Value: 1.2

Growth: 5.1

Quality: 6.2

Yield: 2.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

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Stock-Card
PPG

A-Score: 5.0/10

Value: 4.0

Growth: 2.8

Quality: 6.5

Yield: 5.0

Momentum: 3.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Sherwin-Williams

A-Score: 4.9/10

Value: 1.7

Growth: 6.4

Quality: 6.0

Yield: 2.0

Momentum: 4.0

Volatility: 9.3

1-Year Total Return ->

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Stock-Card
Air Products

A-Score: 4.4/10

Value: 4.8

Growth: 2.9

Quality: 2.1

Yield: 6.0

Momentum: 2.5

Volatility: 8.3

1-Year Total Return ->

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Stock-Card
IFF

A-Score: 4.4/10

Value: 5.4

Growth: 2.3

Quality: 3.1

Yield: 6.0

Momentum: 2.0

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
DuPont

A-Score: 3.5/10

Value: 6.9

Growth: 3.7

Quality: 3.7

Yield: 4.0

Momentum: 0.5

Volatility: 2.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

356.36$

Current Price

356.36$

Potential

-0.00%

Expected Cash-Flows