Analyst Estimates: Here's What Brokers Think Of The Sherwin-Williams Company (NYSE:SHW) After Its Yearly Report

The yearly results for The Sherwin-Williams Company (NYSE:SHW) were released last week, making it a good time to revisit its performance. It was a credible result overall, with revenues of US$23b and statutory earnings per share of US$10.55 both in line with analyst estimates, showing that Sherwin-Williams is executing in line with expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Sherwin-Williams

Taking into account the latest results, the most recent consensus for Sherwin-Williams from 24 analysts is for revenues of US$23.8b in 2025. If met, it would imply a reasonable 3.0% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 8.9% to US$11.64. Before this earnings report, the analysts had been forecasting revenues of US$24.0b and earnings per share (EPS) of US$12.17 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$386, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Sherwin-Williams at US$445 per share, while the most bearish prices it at US$247. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. We would highlight that Sherwin-Williams' revenue growth is expected to slow, with the forecast 3.0% annualised growth rate until the end of 2025 being well below the historical 6.3% p.a. growth over the last five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that Sherwin-Williams is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Sherwin-Williams. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Sherwin-Williams' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$386, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Sherwin-Williams. Long-term earnings power is much more important than next year's profits. We have forecasts for Sherwin-Williams going out to 2027, and you can see them free on our platform here.

You should always think about risks though. Case in point, we've spotted 1 warning sign for Sherwin-Williams you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.