Sherwin Williams Co

Sherwin-Williams maintains a highly leveraged capital structure, with a debt-to-equity ratio of 2.55 and total debt of $9.83 billion against $3.85 billion in equity. The current ratio stands at 0.73, indicating that current liabilities exceed current assets, a condition flagged as a key liquidity risk. Despite holding $293.5 million in cash and equivalents, the company operates with negative net cash after subtracting total debt. Operating cash flow of $1.49 billion supports ongoing obligations, but the reliance on external financing is evident in the high leverage profile.

Profitability metrics show a return on equity of 66.63% and a return on assets of 9.53%, reflecting efficient use of equity capital despite the asset-heavy nature of the business. The gross profit of $6.12 billion on $12.46 billion in revenue yields a gross margin of approximately 49.1%. Net income of $1.38 billion results in a net margin of roughly 11.1%. These returns are supported by a premium valuation, with a price-to-earnings ratio of 34.15 and an EV-to-revenue multiple of 4.13, suggesting the market prices in significant future growth or stability relative to peers.

The company’s revenue is derived from its global operations, with significant exposure to North America, EMEA, and Latin America, including Brazil and Mexico. The business is segmented into Consumer Brands, Performance Coatings, and Paint Stores, with the latter serving as a critical distribution channel. The geographic diversification provides some hedge against regional economic downturns, though the concentration in developed markets exposes the company to cyclical housing and construction trends.

Growth trajectory is supported by consistent revenue generation, with Q2 2026 revenue reaching $12.46 billion. The company continues to invest in capacity expansion and operational efficiencies, as indicated by capital expenditures related to environmental compliance and manufacturing sites. The acquisition of Suvinil and other strategic moves have expanded its footprint in key growth markets, particularly in Latin America.

Risk factors include high liquidity risk due to the current ratio below 1.0 and significant debt levels. Dilution risk is assessed as medium, with source documents mentioning potential offering risks. The company also faces environmental compliance costs and litigation risks, as evidenced by ongoing cases and regulatory interactions. The reliance on LIFO inventory valuation introduces accounting complexities, particularly in periods of fluctuating raw material costs.

Recent events include the filing of an 8-K with material items related to financial results, and ongoing analyst coverage with a mean price target of $380.87. The company has also updated its accounting policies in line with new ASUs regarding environmental credits and inventory disclosures. Analyst sentiment remains cautiously optimistic, with a mean recommendation of 2.36, indicating a slight preference for buying over holding.

Sherwin-Williams Co (SHW) experienced a major shift in institutional positioning as investor ID 587 significantly adjusted its stake in the company. The investor reduced its holdings from 258,922 shares, valued at approximately $83.0 million, to just 4,240 shares, worth roughly $1.4 million. This substantial decrease in share count and portfolio weight was detected on June 26, 2026, marking a notable exit or de-risking move by this specific holder. The change represents a dramatic reduction in the investor's exposure to Sherwin-Williams, with the portfolio weight dropping from 0.0479% to a negligible 0.0008%. This adjustment occurred against the backdrop of the company's broader investor landscape, which includes 36 top holders and membership in two major indices. The magnitude of the share reduction suggests a decisive strategic reallocation by the investor rather than a minor tactical tweak. This activity is part of the initial analysis for the ticker, meaning there is no prior basis for computing delta changes relative to previous reporting periods. The data reflects the state of holdings as of March 31, 2026, providing a snapshot of institutional sentiment at the end of the first quarter. The detection of this change in late June 2026 highlights the lag between the reporting period and the public availability of such holder modifications. For Sherwin-Williams, such a significant reduction by a single investor underscores the dynamic nature of its shareholder base. While the company maintains a stable presence in key indices and a broad base of top holders, the exit of a major stakeholder can influence short-term trading dynamics and market perception. Investors monitoring SHW should note this shift as a key data point in understanding the evolving institutional interest in the paint and coatings manufacturer.

Net income CAGR of 5.9% from FY2023 to FY2025 demonstrates consistent profitability growth despite flat revenue trends.

Analysts project 7.3% upside to a mean price target of $380.87, reflecting positive market sentiment on current valuation.

Cash conversion ratio of 1.34 is well above the cohort median of 0.13, highlighting strong operational cash generation efficiency.

Debt-to-equity ratio of 2.55 places the company in the bottom quartile of its peer group, signaling high financial leverage risk.

Current ratio of 0.87 indicates potential liquidity constraints, as current assets are insufficient to cover short-term liabilities.

Revenue declined by 2.0% year-over-year in the latest period, suggesting stagnation in top-line growth momentum.

Long-term debt increased to $9.3 billion in FY2025, raising concerns about rising interest expenses and refinancing risks.

High liquidity risk and medium dilution risk flags suggest potential challenges in maintaining capital structure stability.

Revenue $12.46B; Net margin 11.1%.

• ▍Revenue $12.46B
• ▍Net margin 11.1%

Revenue $5.67B; Net margin 9.4%.

• ▍Revenue $5.67B
• ▍Net margin 9.4%

Revenue $23.57B; Net margin 10.9%.

• ▍Revenue $23.57B
• ▍Net margin 10.9%

Revenue $23.10B; Net margin 11.6%.

• ▍Revenue $23.10B
• ▍Net margin 11.6%

Revenue $23.10B; Net margin 11.6%.

• ▍Revenue $23.10B
• ▍Net margin 11.6%

Revenue $23.05B; Operating income $4.16B.

• ▍Revenue $23.05B
• ▍Operating income $4.16B
• ▍Net margin 10.4%

Revenue $23.05B; Net margin 10.4%.

• ▍Revenue $23.05B
• ▍Net margin 10.4%