The Sherwin-Williams Company (SHW) Stock Valuation — DCF Analysis
Chemicals - Specialty · NYSE
Current Price
$317.30
Intrinsic Value
$337.3
+5.9% margin of safety
COMPETITIVE MOAT
↑Brand Recognition and Loyalty
Sherwin-Williams benefits from strong brand recognition among consumers and professionals. This allows for premium pricing and repeat business, creating a loyal customer base.
↑Extensive Distribution Network
The company operates a vast network of company-owned stores, providing direct access to customers and control over product placement. This is a significant barrier to entry for competitors.
↑Scale and Purchasing Power
Its large operational scale grants Sherwin-Williams significant purchasing power for raw materials. This leads to cost advantages over smaller rivals in the specialty chemicals sector.
INVESTMENT RISKS
↓Housing Market Sensitivity
The company's performance is closely tied to the cyclical nature of the housing market. A prolonged downturn, as suggested by recent outlooks, could negatively impact sales and profitability.
↓Raw Material Price Volatility
Fluctuations in the cost of key raw materials can impact margins. While scale helps, significant price swings can still pose a challenge to profitability.
↓Intense Competition
The paints and coatings industry is highly competitive, with both large global players and smaller regional companies. This can pressure pricing and market share.
Base case
SHW base case valuation
A base case discounted cash flow model for SHW estimates an intrinsic value of about $337.3 per share, against a current price of $317.3. The model assumes 7.4% annual free cash flow growth, a 10.0% discount rate, and a 27x exit multiple.
Intrinsic Value
$337.3
Margin of safety
+5.9%
Expected annual return
+1.2%
Base case assumptions: 7.4% annual growth, 10.0% discount rate, 27x exit multiple, 5 year projection. Data as of 2026-06-12.
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
Cleveland, Ohio-based The Sherwin-Williams Company, established in 1866, is a prominent global player in the development, manufacturing, distribution, and sale of paints, coatings, and related merchandise. Its extensive customer base encompasses professionals, industrial enterprises, commercial clients, and individual consumers. The company's operations are organized into three key segments: 1. The Americas Group: This division provides architectural paints and coatings, protective and marine products, and original equipment manufacturer (OEM) finishes, catering to architectural and industrial painting contractors, as well as do-it-yourself homeowners. 2. Consumer Brands Group: This segment supplies a broad portfolio of both branded and private-label offerings, including architectural paints, stains, varnishes, wood finishes, and various related items like applicators, adhesives, and aerosols, to retailers and distributors. 3. Performance Coatings Group: Focused on specialized applications, this group develops and sells industrial coatings for wood finishing and general industrial use, automotive refinish products, high-performance protective and marine coatings, coil and packaging coatings, and advanced resins and colorants. Sherwin-Williams reaches its global clientele through its approximately 5,000 company-operated stores and facilities (as of February 17, 2022), alongside direct sales personnel and external representatives. The company maintains a significant international footprint, operating across North and South America, the Caribbean, Europe, Asia, and Australia.
Financial Metrics — SHW Stock Valuation Data
Revenue/Share (TTM)
$97.42
FCF/Share (TTM)
$11.82
ROIC (TTM)
13.7%
ROE (TTM)
58.2%
P/FCF
26.9x
EV/EBITDA
20.5x
FCF Yield
3.71%
Debt/Equity
3.11x
Based on trailing twelve-month data, SHW shows a free cash flow per share of $11.82 and a ROIC of 13.7%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 26.9x and FCF yield of 3.71% 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 $11.82 in free cash flow per share. At the current price of $317.30, 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 26.9x with a free cash flow yield of 3.71%. 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 ($11.82) 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 3.11x, 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 13.7% 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 3.11x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 20.5x, 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 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.