The Sherwin-Williams Company (SHW) Intrinsic Value & DCF Valuation
Chemicals - Specialty · NYSE
Current Price
$343.88
Intrinsic Value
$316.67
-8.6% margin of safety
What Is The Sherwin-Williams Company's Intrinsic Value?
As of 2026-07-29, the base-case DCF model estimates the intrinsic value of The Sherwin-Williams Company (SHW) at $316.67 per share, compared with a market price of $343.88, a margin of safety of -8.6%. The base case assumes 4.4% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $262.28 to $378.9. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is The Sherwin-Williams Company (SHW) Undervalued?
At $343.88, SHW trades about 8.6% above the base-case intrinsic value estimate, a modest premium. By this model the price sits within a normal band, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Extensive Retail Footprint
Sherwin-Williams operates a vast network of company-owned stores, providing unparalleled distribution and direct customer access. This physical presence creates significant barriers to entry for competitors.
↑Brand Recognition and Loyalty
The Sherwin-Williams brand is highly recognized and trusted by both professional painters and DIY consumers. This strong brand equity translates into pricing power and customer loyalty.
↑Scale and Operational Efficiency
As a global leader, Sherwin-Williams benefits from economies of scale in manufacturing, procurement, and logistics. This allows for cost advantages and efficient operations.
INVESTMENT RISKS
↓Raw Material Price Volatility
The cost of key raw materials, such as titanium dioxide and petrochemicals, can fluctuate significantly. This can impact profit margins if not effectively passed on to customers.
↓Housing Market Sensitivity
Demand for paint is closely tied to new construction and home renovation activity. A slowdown in the housing market can negatively affect sales volumes.
↓Regulatory and Environmental Scrutiny
The chemical industry faces ongoing regulatory oversight regarding product safety and environmental impact. Changes in regulations could necessitate costly product reformulation or compliance measures.
Base case
SHW base case valuation
Intrinsic Value
$316.67
Margin of safety
-8.6%
Expected annual return
-1.6%
Base case assumptions: 4.4% annual growth, 10.0% discount rate, 26x exit multiple, 5 year projection. Data as of 2026-07-29.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the SHW valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for The Sherwin-Williams Company respond.
Open DCF Calculator for SHWCompany Overview
The Sherwin-Williams Company engages in the development, manufacture, distribution, and sale of paint, coatings, and related products to professional, industrial, commercial and retail customers. The company operates through three segments: Paint Stores Group, Consumer Brands Group, and Performance Coatings Group. The Paint Stores Group segment offers architectural paint and coatings; protective and marine products; and OEM product finishes and related products for architectural and industrial paint contractors, and do-it-yourself homeowners under the Sherwin-Williams brand. 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, including home centers and hardware stores, and dedicated dealers 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. This segment serves retailers, dealers, jobbers, licensees, and other third-party distributors. The company operates in North America, South America, the Caribbean, Europe, Asia, and Australia. The Sherwin-Williams Company was founded in 1866 and is headquartered in Cleveland, Ohio.
Financial Metrics — SHW Stock Valuation Data
Revenue/Share (TTM)
$99.72
FCF/Share (TTM)
$13.13
ROIC (TTM)
13.9%
ROE (TTM)
62.1%
P/FCF
26.4x
EV/EBITDA
22.1x
FCF Yield
3.79%
Debt/Equity
3.69x
Based on trailing twelve-month data, SHW shows a free cash flow per share of $13.13 and a ROIC of 13.9%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 26.4x and FCF yield of 3.79% are important context metrics when evaluating SHW's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of SHW?
The Sherwin-Williams Company currently generates $13.13 in free cash flow per share. At the current price of $343.88, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is SHW undervalued?
SHW trades at a P/FCF ratio of 26.4x with a free cash flow yield of 3.79%. This P/FCF is in a moderate range. However, whether SHW is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value SHW stock using DCF?
To perform a DCF valuation on The Sherwin-Williams Company: (1) Start with the trailing free cash flow per share ($13.13) 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 — with a debt-to-equity of 3.69x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to SHW?
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 company will produce over the next 5-10 years, shaped by Chemicals - Specialty trends, then discounting those amounts to today's dollars. SHW's ROIC of 13.9% shows moderate capital returns.
How does WACC affect SHW stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For SHW, with a debt-to-equity ratio of 3.69x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 22.1x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See SHW PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Basic Materials valuationsDCF and P/E value SHW with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-29. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.