Key Stats for SHW Stock
- Past week’s performance: -2.3%
- 52-week range: $302 to $380
- Valuation model target price: $402
- Implied upside: 29.6% over 2.7 years
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What Happened?
The Sherwin-Williams Company (SHW) fell about 2.3% over the past week despite reporting better-than-expected Q1 results. Shares are trading near $310, which is close to the 52-week low of $302 and well below the 52-week high of $380. So even a solid quarterly beat could not overcome the broader macro pressure weighing on the stock.
Net sales climbed 6.8% to $5.67 billion. Diluted EPS also rose 7.5% to $2.15 on a reported basis. Price increases drove a meaningful portion of the revenue growth, which helped offset cost pressures from raw materials and logistics.
Management struck an upbeat tone on the earnings call. The company said it plans to open 80 to 100 new stores this year, signaling confidence in its network expansion strategy. Full-year guidance was also maintained, confirming that Q1 strength reflects solid underlying demand rather than a one-time benefit.
The macro environment remains a headwind because housing activity has stayed weak. Management noted that new residential construction could be down mid-single digits this year, which limits demand for paint and coatings in that important segment.
Going forward, investors will watch whether commercial and professional painting demand can offset the residential softness and whether price realization holds through the rest of 2026.
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Is Sherwin-Williams Stock Undervalued?
Under valuation model assumptions realized through 12/31/28, the stock is modeled using:
- Revenue growth (CAGR): 4.9%
- Operating Margins: 18%
- Exit P/E Multiple: 26.2x
Based on these inputs, the model estimates a target price of $402, implying 29.6% total upside from the current share price and a 10.2% annualized return over the next 2.7 years.
A 10.2% annualized return sits just above the 10% threshold that typically defines an attractive investment. So at current levels near $310, the model suggests Sherwin-Williams offers a reasonable entry point for investors with a multi-year time horizon and patience for the housing market to recover.
Revenue growth of 4.9% aligns comfortably with Sherwin-Williams’ historical track record. The company’s 1-year revenue CAGR was 2.1%, the 5-year CAGR was 5.1%, and the 10-year CAGR was 7.6%.
So the model’s forecast sits well within that historical band. Continued store openings, international expansion through the BASF Brazil acquisition, and pricing power support the growth assumption through 2028.
An exit P/E of 26.2x is well-grounded in the stock’s trading history. Sherwin-Williams traded at a 1-year average P/E of 28.5x, and a 5-year average of 28.0x, so the model applies a modest discount to recent historical averages.
The current NTM P/E of around 26.2x already reflects slowing but resilient growth expectations. Wall Street’s consensus target near $378 confirms the market sees meaningful upside from current levels, even if the model projects further gains through 2028.
What’s Driving SHW Stock Going Forward?
New store openings are one of the clearest near-term growth drivers. Management plans to open 80 to 100 new locations in 2026, expanding the already extensive company-operated network.
More stores create more touchpoints with professional painters and contractors, who drive the majority of revenue through the Paint Stores Group segment and tend to generate higher average order values than retail customers.
The BASF Brazil acquisition is a meaningful long-term catalyst. Sherwin-Williams agreed to acquire BASF’s Brazilian architectural paints business for $1.15 billion in cash. Brazil is one of the largest architectural coatings markets in the world, so this deal could meaningfully expand the company’s Latin American footprint and add a new geographic growth engine outside North America.
Pricing power remains a key differentiator for Sherwin-Williams. Price increases flowed through to Q1 revenue with limited customer pushback, supporting margin expansion.
The company’s LTM gross margin is near 49%, and its return on equity exceeds 60%, so the business generates compelling returns even in a slower growth environment. Benjamin Meisenzahl, who became CFO on January 1, 2026, will also bring fresh financial discipline to capital allocation decisions.
The housing market recovery is the biggest wildcard heading into the second half of 2026. New residential construction remains under pressure from elevated mortgage rates, but any easing in rate policy could accelerate repair and remodel activity and new home building.
Because Sherwin-Williams serves both new construction and the renovation market, even a partial improvement in housing conditions could generate meaningful upside to current revenue and earnings estimates.
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Should You Invest in Sherwin-Williams?
The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.
Pull up SHW, and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
