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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' Solid Q3 Performance and Cautious Outlook

Sherwin-Williams delivered a robust third-quarter performance, with consolidated sales increasing at the high end of the guided range. The company's adjusted diluted earnings per share grew by 6.5% to $3.59, beating analyst estimates of $3.45. Gross margin and gross profit dollars expanded, and adjusted EBITDA margin increased by 60 basis points to 21.4%. The company's Paint Stores Group and Consumer Brands Group exceeded expectations, while the Performance Coatings Group was in line.

Publication Date: Oct -30

📋 Highlights
  • Q3 Results Exceeded Guidance: Consolidated sales hit high end of guided range, with Paint Stores and Consumer Brands Groups outperforming expectations.
  • Gross Margin Expansion: Adjusted EBITDA margin rose 60 bps to 21.4%, driven by $864M returned to shareholders via buybacks and dividends.
  • Suvinil Acquisition Impact: Closed Suvinil deal, expected to boost Q4 consolidated sales by low single-digit % and consumer brand sales by ~20%.
  • 2025 Guidance Raised: Full-year 2025 sales growth revised to low single-digit %, with adjusted EPS projected at $11.25–$11.45.

Segment Performance

The Paint Stores Group saw segment profit grow by a mid-single-digit percentage, and segment margin increased by 40 basis points. The Consumer Brands Group's sales beat expectations, driven by growth in Europe and a favorable product mix shift. The Performance Coatings Group's sales were in line with expectations, with packaging being the strongest performer, delivering double-digit growth. As Heidi Petz, President and CEO, noted, the company's strategy continues to resonate with professional painting contractors and manufacturers seeking predictability and reliability.

Outlook and Guidance

The company updated its full-year 2025 sales guidance to be up by a low single-digit percentage versus 2024. For 2026, the company expects a challenging demand environment to persist, with raw material costs increasing by a low single-digit percentage. Analysts estimate next year's revenue growth at 4.4%. Sherwin-Williams' current valuation metrics, including a P/E Ratio of 33.1 and EV/EBITDA of 22.56, suggest that the market is pricing in a relatively strong growth outlook.

Pricing and Margin Expansion

The company announced a 7% price increase in the Paint Stores Group, effective January 1, to counter cost headwinds and drive growth. According to Allen Mistysyn, CFO, the price increase was driven by higher year-over-year increases in raw material costs and other cost basket increases. The company aims to balance price and volume growth, focusing on growing operating margin and delivering strong incremental margins.

Growth Initiatives and Investments

Sherwin-Williams continues to invest in growth initiatives, including opening 23 net new stores in the quarter and adding sales reps to serve new accounts. The company is also investing in the res repaint segment, which is its largest and fastest-growing segment, and expects to take advantage of the increasing activity in remodeling. The acquisition of Suvinil is expected to increase consolidated sales by a low single-digit percentage and increase consumer brand sales by around 20%.

3. NewsRoom

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BLI Banque de Luxembourg Investments Acquires New Holdings in The Sherwin-Williams Company $SHW

Dec -01

Source: defenseworld.net

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Aviso Financial Inc. Purchases 1,158 Shares of The Sherwin-Williams Company $SHW

Nov -25

Source: defenseworld.net

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Bailard Inc. Purchases Shares of 1,433 The Sherwin-Williams Company $SHW

Nov -15

Source: defenseworld.net

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Chase Coleman's Strategic Moves: Meta Platforms Inc. Sees Significant Reduction

Nov -14

Source: gurufocus.com

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Touchstone Dividend Equity Fund Q3 2025 Portfolio Review

Nov -13

Source: seekingalpha.com

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Alpha Cubed Investments LLC Buys 338 Shares of The Sherwin-Williams Company $SHW

Nov -11

Source: defenseworld.net

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Rates dropping will unlock renovation cycle, says Obermeyer's Ali Flynn Phillips on Sherwin-Williams

Nov -07

Source: youtube.com

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The Sherwin-Williams Company (SHW) Discusses CFO Transition and Appointment of New Chief Financial Officer Transcript

Nov -04

Source: seekingalpha.com

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

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Air Products

A-Score: 5.2/10

Value: 3.6

Growth: 5.4

Quality: 4.2

Yield: 6.0

Momentum: 2.5

Volatility: 9.3

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Ecolab

A-Score: 5.1/10

Value: 1.4

Growth: 5.1

Quality: 6.2

Yield: 2.0

Momentum: 6.0

Volatility: 10.0

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PPG

A-Score: 4.7/10

Value: 3.7

Growth: 2.8

Quality: 6.2

Yield: 5.0

Momentum: 2.0

Volatility: 8.3

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Sherwin-Williams

A-Score: 4.6/10

Value: 1.4

Growth: 6.4

Quality: 5.9

Yield: 2.0

Momentum: 3.0

Volatility: 9.0

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A-Score: 4.6/10

Value: 4.9

Growth: 3.7

Quality: 4.3

Yield: 4.0

Momentum: 3.0

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IFF

A-Score: 4.3/10

Value: 5.1

Growth: 2.3

Quality: 3.4

Yield: 6.0

Momentum: 1.0

Volatility: 8.0

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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

333.11$

Current Price

333.11$

Potential

-0.00%

Expected Cash-Flows