NYSE:SHW
SHERWIN WILLIAMS CO
A premier global coatings manufacturer leveraging strong brand equity and extensive retail distribution to deliver high-performance paints and industrial solutions.
Key Metrics
Investment Thesis
Bull Case
Investors may favor Sherwin-Williams due to its consistent ability to pass input cost increases to customers and its defensive characteristics within the consumer staples space. The company's dominant market position and recurring revenue streams from B2B contracts provide a predictable earnings profile that supports long-term value creation.
Bear Case
Concerns regarding potential stagnation in revenue growth as the company approaches mature markets could limit future expansion opportunities. High levels of total liabilities relative to equity, coupled with recent cash outflows for investing activities, suggest a cautious approach is warranted until debt ratios improve significantly.
About SHERWIN WILLIAMS CO
Sherwin-Williams Company operates as a global leader in coatings solutions, serving diverse markets including industrial, commercial, residential, and automotive sectors through its extensive network of paint stores and distribution centers. The company generates revenue by selling a comprehensive portfolio of paints, stains, primers, sealants, adhesives, and specialty protective coatings to both professional contractors and do-it-yourself consumers across North America and internationally.
Analysis
Management Discussion
The company reported revenue of $23.57 billion with a net profit of $2.57 billion, reflecting stable growth amidst challenging macroeconomic conditions. While operating cash flow remained robust at $3.45 billion, the firm utilized significant capital for acquisitions totaling $1.21 billion and returned value to shareholders through dividends of nearly $790 million.
Industry Overview
The global coatings industry is characterized by consolidation and a shift towards sustainable, high-performance products driven by regulatory changes and environmental concerns. Competition remains intense in the residential segment but offers higher margins in specialized industrial applications where Sherwin-Williams holds significant market share.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue | $22.15B | $23.05B | $23.10B | $23.57B |
| Cost of Revenue | $12.82B | $12.29B | $11.90B | $12.06B |
| Gross Profit | $9.33B | $10.76B | $11.20B | $11.52B |
| Operating Expenses | $5.93B | $6.60B | $7.74B | $8.18B |
| Operating Income | $3.40B | $4.16B | $3.45B | $3.34B |
| G&A | $433.3M | $634.3M | $7.42B | $7.70B |
| Stock-Based Comp | $99.7M | $115.9M | $138.1M | $123.5M |
| Depreciation | $264.0M | $292.3M | $297.4M | $340.3M |
| Amortization | $317.1M | $330.2M | $326.6M | $336.6M |
| Other OpEx | $5.49B | $5.96B | $321.2M | $482.3M |
| Non-Operating Income | $-824.1M | $-1.05B | $0 | $0 |
| Interest Expense | $390.8M | $417.5M | — | — |
| Interest Income | $8.0M | $25.2M | — | — |
| Pre-Tax Income | $2.57B | $3.11B | $3.45B | $3.34B |
| Income Tax | $553.0M | $721.1M | $770.4M | $769.7M |
| Continuing Ops | $2.02B | $2.39B | $2.68B | $2.57B |
| Discontinued Ops | $0 | $0 | $0 | $0 |
| Net Income | $2.02B | $2.39B | $2.68B | $2.57B |
| Minority Interest | $0 | $0 | $0 | $0 |
| Net to Common | $2.02B | $2.39B | $2.68B | $2.57B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Current Assets | $5.91B | $5.51B | $5.40B | $6.01B |
| Cash & Equivalents | $198.8M | $276.8M | $210.4M | $207.2M |
| Accounts Receivable | $2.56B | $2.47B | $2.39B | $2.79B |
| Inventory | $2.63B | $2.33B | $2.29B | $2.32B |
| Other Current Assets | $518.8M | $438.4M | $513.5M | $690.8M |
| Long-Term Assets | $16.69B | $17.44B | $18.23B | $19.89B |
| PP&E (Net) | $2.21B | $2.84B | $3.53B | $4.14B |
| Intangibles | $4.00B | $3.88B | $3.53B | $3.97B |
| Goodwill | $7.58B | $7.63B | $7.58B | $8.04B |
| Operating Leases | $1.87B | $1.89B | $1.95B | $2.00B |
| Other LT Assets | $1.03B | $1.21B | $1.63B | $1.76B |
| Total Assets | $22.59B | $22.95B | $23.63B | $25.90B |
| Current Liabilities | $5.96B | $6.63B | $6.81B | $6.92B |
| Accounts Payable | $2.44B | $2.31B | $2.25B | $2.35B |
| Current Debt | $600.0K | $1.10B | $1.05B | $350.1M |
| Current Leases | $425.3M | $449.3M | $466.6M | $479.8M |
| Deferred Revenue | $292.9M | $365.7M | $386.2M | $427.3M |
| Other Current Liab | $2.81B | $2.40B | $2.65B | $3.31B |
| Long-Term Liabilities | $13.53B | $12.61B | $12.77B | $14.38B |
| Long-Term Debt | $9.59B | $8.38B | $8.18B | $9.32B |
| LT Operating Leases | $1.51B | $1.51B | $1.56B | $1.59B |
| Other LT Liab | $2.42B | $2.72B | $3.04B | $3.46B |
| Total Liabilities | $19.49B | $19.24B | $19.58B | $21.30B |
| Shareholders' Equity | $3.10B | $3.72B | $4.05B | $4.60B |
| Paid-In Capital | $3.96B | $4.19B | $4.58B | $4.20B |
| Retained Earnings | $3.52B | $5.29B | $7.25B | $1.03B |
| AOCI | $-700.6M | $-624.3M | $-875.2M | $-634.4M |
| Total L&E | $22.59B | $22.95B | $23.63B | $25.90B |
| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Net Income (CFO) | $2.02B | $2.39B | $2.68B | $2.57B |
| Non-Cash Adjustments | $-961.3M | $2.05B | $869.4M | $1.35B |
| Working Capital Changes | $861.1M | $-915.8M | $-397.6M | $-468.7M |
| Cash from Operations | $1.92B | $3.52B | $3.15B | $3.45B |
| Cash from Investing | $-1.61B | $-1.04B | $-1.20B | $-2.07B |
| Debt Issuances | $999.7M | $0 | $848.7M | $1.50B |
| Debt Repayments | $260.3M | $136.4M | $1.10B | $1.05B |
| Dividends Paid | $618.5M | $623.7M | $723.4M | $789.8M |
| Cash from Financing | $-282.4M | $-2.42B | $-2.02B | $-1.38B |
| FX Effect | $3.2M | $20.0M | $-6.2M | $-9.9M |
| Net Change in Cash | $33.1M | $78.0M | $-66.4M | $-3.2M |
| Beginning Cash | $165.7M | $198.8M | $276.8M | $210.4M |
| Ending Cash | $198.8M | $276.8M | $210.4M | $207.2M |
Frequently Asked Questions
How does SHERWIN WILLIAMS CO make money?
The company's revenue is driven by four primary segments: Industrial Coatings which serves construction, automotive, and oil & gas sectors; Architectural Coatings focused on residential and commercial painting markets; Protective Coatings providing durable solutions for infrastructure and transportation; and Automotive Coatings supplying finishes for vehicle manufacturers.
What are the main risks for SHW?
Fluctuations in raw material costs such as resins and solvents can impact gross margins despite pricing power. Exposure to economic downturns may reduce demand in the residential and automotive segments. Rising interest rates could increase borrowing costs given the company's significant long-term debt load of approximately $9.32 billion.
What is SHW's competitive advantage?
Sherwin-Williams benefits from an unmatched global distribution network comprising over 1,400 retail locations that provide immediate product availability to customers. Its vertical integration allows for superior supply chain management and cost control, while a strong portfolio of proprietary technology in protective coatings creates high barriers to entry for competitors.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.