Now trading at a price of $344.5, Sherwin-Williams has moved 6.9% so far today.
Sherwin-Williams returned gains of 22.6% last year, with its stock price reaching a high of $348.37 and a low of $232.06. Over the same period, the stock returned a similar cumulative performance to the S&P 500. The company's 50-day average price was $306.59.
The Sherwin-Williams Company engages in the development, manufacture, distribution, and sale of paints, coating, and related products to professional, industrial, commercial, and retail customers. Based in Cleveland, OH, the Large-Cap Consumer Discretionary company has 64,088 full time employees. Sherwin-Williams has offered a 0.8% dividend yield over the last 12 months.
Wider Gross Margins Than the Industry Average of 34.38%:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $17,534 | $17,901 | $18,362 | $19,945 | $22,149 | $23,052 |
| Gross Margins | 42% | 45% | 47% | 43% | 42% | 47% |
| Net Margins | 6% | 9% | 11% | 9% | 9% | 10% |
| Net Income (M) | $1,109 | $1,541 | $2,030 | $1,864 | $2,020 | $2,389 |
| Net Interest Expense (M) | $367 | $349 | $340 | $335 | $391 | $418 |
| Depreciation & Amort. (M) | $278 | $262 | $268 | $263 | $264 | $292 |
| Diluted Shares (M) | 285 | 280 | 276 | 267 | 262 | 258 |
| Earnings Per Share | $3.89 | $5.5 | $7.36 | $6.98 | $7.72 | $9.25 |
| EPS Growth | n/a | 41.39% | 33.82% | -5.16% | 10.6% | 19.82% |
| Avg. Price | $131.13 | $157.01 | $199.0 | $277.45 | $261.99 | $344.5 |
| P/E Ratio | 33.37 | 28.34 | 27.11 | 39.98 | 33.76 | 37.28 |
| Free Cash Flow (M) | $1,693 | $1,992 | $3,105 | $1,873 | $1,275 | $2,634 |
| CAPEX (M) | $251 | $329 | $304 | $372 | $644 | $888 |
| EV / EBITDA | 28.17 | 23.36 | 22.66 | 33.25 | 27.35 | 29.2 |
| Total Debt (M) | $9,322 | $8,910 | $8,317 | $9,112 | $9,592 | $10,576 |
| Net Debt / EBITDA | 5.6 | 3.9 | 2.9 | 3.56 | 3.31 | 3.03 |
| Current Ratio | 1.01 | 1.02 | 1.0 | 0.88 | 0.99 | 0.83 |
Sherwin-Williams has growing revenues and increasing reinvestment in the business and generally positive cash flows. Additionally, the company's financial statements display wider gross margins than its peer group and a strong EPS growth trend. However, the firm has not enough current assets to cover current liabilities because its current ratio is 0.83. Finally, we note that Sherwin-Williams has significant leverage levels.
Sherwin-Williams's Valuation Is in Line With Its Sector Averages:
Sherwin-Williams has a trailing twelve month P/E ratio of 31.2, compared to an average of 22.15 for the Consumer Discretionary sector. Based on its EPS guidance of $12.74, the company has a forward P/E ratio of 24.1. Sherwin-Williams's PEG ratio is 2.38 on the basis of the 13.1% weighted average of the company and the broader market's EPS compound average growth rates. This suggests that the company's shares are overvalued. Furthermore, Sherwin-Williams is likely overvalued compared to the book value of its equity, since its P/B ratio of 23.05 is higher than the sector average of 3.11. The company's shares are currently trading 529.6% below their Graham number. Ultimately, Sherwin-Williams's strong cash flows, decent earnings multiple, and healthy debt levels factor towards it being fairly valued, its elevated P/B ratio notwithstanding.
Sherwin-Williams Has an Average Rating of Buy:
The 23 analysts following Sherwin-Williams have set target prices ranging from $261.0 to $400.0 per share, for an average of $350.47 with a buy rating. The company is trading -1.7% away from its average target price, indicating that there is an analyst consensus of some upside potential.
Sherwin-Williams has a very low short interest because 1.8% of the company's shares are sold short. Institutions own 80.4% of the company's shares, and the insider ownership rate stands at 7.85%, suggesting a large amount of insider shareholders. The largest shareholder is Vanguard Group Inc, whose 9% stake in the company is worth $7,448,413,485.
