Sherwin-Williams (SHW): Evaluating Value After Lowered Earnings Guidance and Softer Demand in Q2 2025

If you’re holding or eyeing Sherwin-Williams (SHW) shares, the latest quarterly results might be prompting you to reconsider your next move. The company posted a slight sales increase for the second quarter of 2025, but both diluted and adjusted earnings per share declined. Management did not shy away from calling out softer demand and higher costs as the culprits, lowering full-year earnings guidance to reflect these headwinds. With this update, it is no surprise investors are poring over the numbers, wondering whether the dip in profitability will be a temporary blip or something bigger for the paint giant.

These results land amid a tough stretch for Sherwin-Williams’ stock, capping a 10-day losing streak and a 7.8% drop that is the sharpest slide in years. While the long-term chart shows strong gains across three- and five-year periods, momentum has cooled significantly over the past year, with a nearly 10% decline. Recent headlines about color launches and ongoing dividends continue to make waves, but the market focus seems fixed on the company’s challenged outlook and what it means for future earnings power.

With the stock’s recent pullback and management resetting expectations, the big question is whether Sherwin-Williams is now trading at a discount or if the market is already pricing in a slower path ahead. Is there real value emerging here, or is caution still warranted?

Most Popular Narrative: 9.9% Undervalued

According to the most widely followed narrative, Sherwin-Williams is currently undervalued by nearly 10% based on long-term earnings potential and forecasted growth, using a discount rate of 7.6%.

Heightened investment in targeted customer-facing growth initiatives during a period of competitor retrenchment, layoffs, and price disruptions in the industry is likely to accelerate share gains with professional contractors and commercial projects, supporting long-term topline growth substantially above industry averages.

Want to know how Sherwin-Williams could gain ground while others pull back? See what unique earnings, margin, and growth assumptions give this narrative its bullish math. The drivers behind this fair value might surprise you. Look inside for the details powering this viewpoint on true worth.

Result: Fair Value of $379.52 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent weak demand or a surprisingly stubborn slowdown in end markets could threaten Sherwin-Williams’ rebound and stall expected earnings growth.

Find out about the key risks to this Sherwin-Williams narrative.

Another Perspective: Comparing to Industry Pricing

Taking a look at valuation from the standpoint of industry pricing tells a different story. Sherwin-Williams is actually trading at a steeper price compared to similar companies in its sector. Could this pricing reflect hidden strength or heightened risk?

See what the numbers say about this price — find out in our valuation breakdown.

Stay updated when valuation signals shift by adding Sherwin-Williams to your watchlist or portfolio. Alternatively, explore our screener to discover other companies that fit your criteria.

Build Your Own Sherwin-Williams Narrative

If you have your own take on Sherwin-Williams’ prospects or want to approach the numbers firsthand, crafting a personal narrative is quick and straightforward. Do it your way

A great starting point for your Sherwin-Williams research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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