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    How Slower Organic Growth And Rising Investment Needs Could Impact Sherwin-Williams (SHW) Investors

    Simply Wall St·12/25/2025 13:29:12
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    • In recent years Sherwin-Williams has reported organic revenue growth and earnings per share increases that trailed industry benchmarks, while its free cash flow margin has compressed as the company increased investment to protect its competitive position.
    • This combination of slower-than-peer growth and rising investment needs highlights how Sherwin-Williams is working harder to hold ground in a more demanding coatings market.
    • We’ll now examine how Sherwin-Williams’ weaker organic growth versus peers reshapes its investment narrative and the balance between expansion and profitability.

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    Sherwin-Williams Investment Narrative Recap

    To own Sherwin-Williams, you need to believe its dense store network, contractor relationships, and coating technologies can still compound value even as growth cools and investment needs rise. The latest news of slower organic revenue and EPS growth, coupled with thinner free cash flow margins, reinforces that the key short term catalyst is whether recent spending actually stabilizes share and margins. It also sharpens the biggest risk today: weaker demand meeting higher capital intensity.

    The most relevant recent announcement here is management’s reaffirmation of full year 2025 guidance for low single digit sales growth and EPS of US$10.70 to US$11.10. That guidance sits uncomfortably beside the slower than benchmark growth and declining free cash flow margin, and it concentrates attention on execution: can Sherwin-Williams translate heavier investment into even modest volume and earnings progress without further squeezing cash generation.

    Yet behind the store growth story, there is another risk investors should be aware of around Sherwin-Williams’ heavy reliance on the North American housing cycle and...

    Read the full narrative on Sherwin-Williams (it's free!)

    Sherwin-Williams' narrative projects $26.3 billion revenue and $3.4 billion earnings by 2028. This requires 4.5% yearly revenue growth and about a $0.9 billion earnings increase from $2.5 billion today.

    Uncover how Sherwin-Williams' forecasts yield a $385.81 fair value, a 19% upside to its current price.

    Exploring Other Perspectives

    SHW Earnings & Revenue Growth as at Dec 2025
    SHW Earnings & Revenue Growth as at Dec 2025

    Some analysts were far more optimistic, expecting revenue of about US$26.9 billion and earnings near US$3.9 billion, even as the latest organic growth trends and North American housing dependence suggest those bullish views may need revisiting.

    Explore 5 other fair value estimates on Sherwin-Williams - why the stock might be worth as much as 29% more than the current price!

    Build Your Own Sherwin-Williams Narrative

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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.