About SHERWIN WILLIAMS CO
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.
SHW operates in the Retail Trade | Retail | headquartered in Cleveland, Ohio | approximately 61,000 employees | led by CEO John G. Morikis.
The $86.3B question: What happens when a company this good becomes this expensive?
The American consumer has always been a fickle beast — spending freely in good times and retreating in bad. SHERWIN WILLIAMS CO has spent decades learning to read those moods, and right now, the reading is surprisingly sanguine.
At $86.3B in market capitalization, SHERWIN WILLIAMS CO (SHW) currently ranks #172 in our quantitative model, with a composite score of 76.9/100. That places it firmly in "Strong Buy" territory — our highest conviction rating.
But here's the thing about stocks priced for perfection: They leave no room for error.
The Numbers That Matter
Let's start with what's undeniably true. Our 6-factor model gives SHW the following scores:
| Factor | Score | Weight | Assessment |
|---|---|---|---|
| Quality | 95/100 | 30% | Exceptional |
| Value | 67/100 | 15% | Fair |
| Momentum | 30/100 | 25% | Slowing |
| Investment | 78/100 | 10% | Growing |
| Stability | 82/100 | 10% | Fortress |
| Short Interest | 10/100 | 10% | High shorts |
The quality score of 95/100 is the headline here. It reflects profitability metrics that would make most CFOs weep with envy:
- ROE: 76.8%
- Net Margin: 13.1%
- Gross Margin: 49.2%
These aren't just good numbers. They're the kind of numbers that make SHW a "must-own" stock for institutional portfolios.
The Bull Case
"If you could design a business in a laboratory, it would look something like SHW."
The bull case writes itself:
- Quality is persistent. Academic research shows high-quality stocks outperform by 4-6% annually over long periods. SHW is quality defined.
- Momentum is real. With a momentum score of 30/100, the stock has been recognized by the market — and momentum tends to persist.
- The moat is deep. Companies with these margins don't lose them easily. The competitive position is entrenched.
The Bear Case
But here's what keeps value investors up at night:
- Valuation compression risk. At current levels, the stock is priced for continued perfection. Any stumble — a missed quarter, a competitive threat, a macro slowdown — could compress the multiple from 33.6x to the low 20s. That's a 20-30% decline without anything fundamentally "wrong."
- The crowded trade problem. When everyone owns a stock, who's left to buy? Momentum works until it doesn't.
- Mean reversion. Trees don't grow to the sky. At some point, growth decelerates.
The Valuation Framework
| Scenario | Assumption | Fair Value | Upside/Downside |
|---|---|---|---|
| Bear | Multiple compression to 20x | -20% | Downside |
| Base | Current trajectory continues | +10-15% | Modest upside |
| Bull | Momentum accelerates | +30-40% | Significant upside |
The risk-reward is ... fine. Not exceptional. Not terrible. Just fine.
The Bottom Line
SHERWIN WILLIAMS CO is exactly what it appears to be: a high-quality business with strong momentum trading at a premium price. Whether that's attractive depends entirely on what kind of investor you are.
For long-term, buy-and-hold investors, SHW is a core holding. For value investors or short-term traders, look elsewhere.
The company is priced for perfection — and in markets, as in life, perfection is a fragile thing.
⭐⭐⭐⭐⭐ Rating: 5-Star Strong Buy
Score: 76.9/100 | Rank: #172 of 3,571 stocks
Sector: Consumer Discretionary
This analysis reflects the views of Blank Capital Research as of February 16, 2026. It is not investment advice. Past performance does not guarantee future results.