- For investors asking whether Sherwin-Williams at around US$318 a share represents fair value, a bargain, or a premium price, this article looks directly at what the numbers indicate about the stock.
- The share price closed at US$318.00, with a 0.5% decline over 7 days, an 8.8% decline over 30 days, a 3.0% decline year to date, and a 5.8% decline over 1 year. The 3 year and 5 year returns stand at 45.8% and 31.1% respectively.
- These mixed returns put valuation in the spotlight as investors weigh shorter term weakness against multi year gains. Recent coverage has examined how a well known coatings business fits into portfolios at today’s price, which increases interest in whether the current level still matches underlying fundamentals.
- Sherwin-Williams currently has a value score of 2 out of 6. This raises the key question of how different valuation approaches interpret that score, and whether a broader framework introduced at the end of this article can provide an even clearer view of what the stock might be worth.
Sherwin-Williams scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.
Approach 1: Sherwin-Williams Discounted Cash Flow (DCF) Analysis
A Discounted Cash Flow, or DCF, model takes the cash Sherwin-Williams is expected to generate in the future, then discounts those projections back to a single value in today’s dollars. It is essentially asking what those future cash flows are worth right now.
Sherwin-Williams last twelve month Free Cash Flow is about $2.52b. Analyst and extrapolated projections used in this 2 Stage Free Cash Flow to Equity model point to Free Cash Flow of $4.61b in 2035, with interim years such as 2026 and 2029 sitting at $2.90b and $3.70b respectively. These cash flows are all in $ and have been discounted using Simply Wall St’s model assumptions.
Putting those cash flows together, the DCF model yields an estimated intrinsic value of about $326.15 per share, compared with the current share price of $318.00. That points to an implied 2.5% discount, which is a small gap rather than a clear bargain or clear premium.
Result: ABOUT RIGHT
Sherwin-Williams is fairly valued according to our Discounted Cash Flow (DCF), but this can change at a moment's notice. Track the value in your watchlist or portfolio and be alerted on when to act.
Approach 2: Sherwin-Williams Price vs Earnings
For a profitable company like Sherwin-Williams, the P/E ratio is a useful shorthand for how much you are paying for each dollar of current earnings. It ties directly to what the business is earning today, which many investors find easier to relate to than more technical cash flow models.
What counts as a “normal” or “fair” P/E often reflects how fast earnings are expected to grow and how risky those earnings are. Higher growth or lower perceived risk can justify a higher multiple, while slower growth or higher risk usually points to a lower one.
Sherwin-Williams currently trades on a P/E of 30.45x. That sits close to the Chemicals industry average of about 29.18x and the peer group average of 30.19x. This suggests the market is broadly in line with how it prices comparable names. Simply Wall St’s Fair Ratio for Sherwin-Williams is 24.77x, which is a proprietary estimate of what the P/E might be given its earnings growth profile, industry, profit margins, market cap and risk indicators.
The Fair Ratio aims to improve on simple peer or industry comparisons by adjusting for those company specific traits, rather than assuming all businesses deserve the same multiple. With the current P/E above the Fair Ratio, the shares are screening as somewhat expensive on this metric.
Result: OVERVALUED
P/E ratios tell one story, but what if the real opportunity lies elsewhere? Start investing in legacies, not executives. Discover our 20 top founder-led companies.
Upgrade Your Decision Making: Choose your Sherwin-Williams Narrative
Earlier it was mentioned that there is an even better way to understand valuation, so Narratives are introduced here as a simple way for you to attach a clear story about Sherwin-Williams to specific numbers for future revenue, earnings and margins, then connect that story to a Fair Value that you can compare with the current share price.
A Narrative on Simply Wall St’s Community page is your summary of what you think is really driving the business, linked directly to a forecast and a Fair Value estimate. Instead of just seeing a P/E of 30.45x, you see how your assumptions about things like store growth, input costs or acquisitions actually flow through to that number.
Narratives update automatically when new data, news or earnings are added to the platform. This means your Fair Value is refreshed as the facts change and you can quickly see whether the current Sherwin-Williams price looks above or below the range that fits your story.
For Sherwin-Williams, one bearish Narrative on the Community page currently points to a Fair Value of about US$320.98 per share, while a more optimistic Narrative points to about US$420.00. This shows how two investors looking at the same company can reasonably arrive at very different conclusions about what the stock is worth today.
Do you think there's more to the story for Sherwin-Williams? Head over to our Community to see what others are saying!
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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