Chemicals - Specialty · NYSE
Current Price
$317.85
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on The Sherwin-Williams Company with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
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.
ROIC (TTM)
13.7%
ROE (TTM)
58.2%
FCF Yield
3.69%
Based on trailing twelve-month data, SHW shows a free cash flow per share of N/A and a ROIC of 13.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 3.69% are important context metrics when evaluating SHW's stock valuation relative to peers.
The intrinsic value of SHW depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether SHW is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $317.85. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on The Sherwin-Williams Company: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Chemicals - Specialty industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting SHW's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For The Sherwin-Williams Company, this means projecting how much free cash flow the Chemicals - Specialty will produce over the next 5-10 years, then discounting those amounts to today's dollars. SHW's ROIC of 13.7% shows moderate capital returns.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For SHW, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
