Cleveland, Ohio-based The Sherwin-Williams Company (SHW) develops and distributes paints, coatings, and related products to industrial, commercial and retail customers. With a market cap of $91.1 billion, Sherwin-Williams operates through Paint Stores Group (PSG), Consumer Brands Group (CBG), and Performance Coatings Group (PCG) segments.
Companies worth $10 billion or more are generally described as “large-cap stock,” Sherwin-Williams fits this bill perfectly. Given its extensive operations and brand portfolio and influence in the paint and coating industry, its valuation above this mark is unsurprising.
SHW stock touched its all-time high of $400.42 on Nov. 27, 2024, and is currently trading 10.1% below that peak. Over the past three months, SHW has plunged 6.5%, slightly underperforming the S&P 500 Index’s ($SPX) 5.8% decline during the same time frame.
Over the longer term, Sherwin-Williams’ performance looks even grimmer. SHW gained 7% over the past 52 weeks and dipped 21 basis points over the past six months, notably underperforming SPX’s 12.4% surge over the past year and 6.1% gains over the past six months.
To confirm the recent downturn, SHW fell below its 50-day moving average in early December 2024 and traded near its 200-day moving average over the past three months, which has remained relatively flat in recent months.
Sherwin-Williams stock price observed a 1.4% uptick after the release of its Q4 results on Jan. 30. While its CBG and PCG segments observed a decline in revenues, SHW’s PSG segment delivered a 3.4% year-over-year growth in net sales to more than $3 billion. The company’s overall topline inched up by a modest 86 basis points compared to the year-ago quarter to $5.3 billion, which missed the Street’s expectations. On a more positive note, the company observed notable margin expansion across segments, leading to a 15.5% increase in adjusted EPS to $2.09, exceeding the consensus estimates by approximately 1%.
Due to poor industry demand, Sherwin-Williams’ topline performance remained weak throughout 2024. Moving into fiscal 2025, the company expects to deliver above-market sales growth. However, industry demand is anticipated to remain soft throughout 2025 and may not revive in 2026 either. As a result, the company expects its FY 2025 net sales to grow by a low single digit. On the brighter side, Sherwin-Williams plans to cut costs and focus on efficiency, which may lead to modest margin expansion.
Sherwin-Williams has notably outperformed its competitor PPG Industries, Inc.’s (PPG) 17.7% drop in stock prices over the past 52 weeks and a 7.5% decline over the past six months.
Among the 25 analysts covering the SHW stock, the consensus rating is a “Moderate Buy.” Its mean price target of $396.82 suggests a 10.2% upside from current price levels.
