The Sherwin-Williams Company (SHW) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: The Sherwin-Williams Company

Updated on October 28, 2026 · accounts published on October 27, 2026

Reading of October 27, 2026: A highly profitable business with steady returns on capital and flat recent growth

Sherwin-Williams trades at a P/E of 30.0 over the last 12 months, 11 % below its ten-year median of 33.5 but 59 % above its sector median.

• Is Sherwin-Williams expensive or cheap? Its P/E of 30.0 is 11 % below its ten-year median of 33.5, yet 59 % above the sector median of 18.8.
• How is the business doing? Operating margin of 16 % over the last 12 months beats its 2014-2025 average of 14 %, though EPS fell 2.7 %.
• How strong is the balance sheet? Net debt is 2.9× EBITDA in fiscal 2025, just under the 3.0× healthy limit, with 11 years of dividend increases.
• What to expect from the next earnings? Next results on February 4, 2027, with analysts expecting EPS of $2.36; the 2026 EPS consensus holds at $12.09.
• Can the balance sheet weather a downturn in the cycle? Six of eight basic-materials checks pass; the free cash flow yield of 3.8 % falls short of the 8 % healthy level.

Is Sherwin-Williams expensive or cheap?

Over the last 12 months Sherwin-Williams trades at a P/E of 30.0, 11 % below its ten-year median of 33.5. In the past decade the stock has traded at a lower P/E only 26 % of the time, within a range of 19.4 to 49.9. Against its sector the picture changes: the sector median P/E is 18.8, so Sherwin-Williams carries a 59 % premium. EV/EBITDA of 20.2× sits below its seven-year average of 23.2×, while the free cash flow yield of 3.8 % is modest. It is cheaper than its own history and still priced as a quality name.

How is the business doing?

Revenue grew 2.1 % over the last 12 months while EPS slipped 2.7 %, so growth has stalled for now. Profitability holds up better: the operating margin of 16 % is above the 14 % average of fiscal 2014-2025 and in line with fiscal 2025. ROIC of 14 % over the last 12 months stands 5.1 points above the sector median of 9 %, and it has stayed above 10 % in 9 of the last 10 fiscal years, with the weakest at 10.0 % in 2018. A gross margin of 49 % in fiscal 2025 clears the 30 % healthy mark for basic materials comfortably.

How strong is the balance sheet?

Debt is the tightest point. Net debt equals 2.9× EBITDA in fiscal 2025, just below the 3.0× healthy threshold for basic materials, and the current ratio of 0.71 over the last 12 months leaves little short-term cushion. Debt to equity is a moderate 0.52 and the Altman Z of 3.7 sits in the safe zone above 2.99. The dividend looks well protected: free cash flow covered it 3.4× in fiscal 2025, the payout was 31 % of earnings and the dividend per share has risen for 11 consecutive fiscal years. The 1.0 % yield over the last 12 months is small.

What to expect from the next earnings?

On October 27, 2026 Sherwin-Williams reported EPS of $3.63, 1.6 % below the $3.69 expected, an unusual miss for a company that beat estimates in 6 of the last 8 quarters. Analysts have barely moved: the 2026 EPS consensus went from $12.11 to $12.09 over the last 30 days across 16 analysts, and revenue estimates are also unchanged. For the quarter due on February 4, 2027 they expect EPS of $2.36. Of 38 analysts, 22 rate it a buy, 15 a hold and 1 a sell, a broadly positive but not unanimous stance.

Can the balance sheet weather a downturn in the cycle?

Basic materials companies are tied to raw material prices, so a plain P/E can mislead: earnings swing with the cycle, and what matters is cost position and whether the dividend survives a trough. Sherwin-Williams passes most of these tests. Its fiscal 2025 gross margin of 49 % is well above the 30 % healthy level, capex ran at 1.2× depreciation, inside the 0.8× to 1.5× range, and the Altman Z of 3.7 is safe. The weak points are linked to the price: a free cash flow yield of 3.8 % against an 8 % benchmark and a P/B of 2.9× against a 2.0× ceiling.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.