Sherwin-Williams Q4 Earnings Beat Expectations with 2026 Guidance
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 18h ago
0mins
Source: seekingalpha
- Earnings Beat: Sherwin-Williams reported a Q4 non-GAAP EPS of $2.23, exceeding expectations by $0.07, which reflects the company's strong market performance and boosts investor confidence.
- Revenue Growth: The company achieved $5.6 billion in revenue for Q4, a 5.7% year-over-year increase that surpassed market expectations by $30 million, indicating robust growth in the competitive coatings industry.
- Cash Flow Performance: With net operating cash of $3.45 billion, representing 14.6% of net sales for the year, the company is well-positioned for future investments and acquisitions, enhancing its financial stability.
- 2026 Guidance: The firm projects diluted net income per share for 2026 in the range of $10.70 to $11.10, with adjusted diluted net income per share between $11.50 and $11.90, falling short of the consensus estimate of $12.38, reflecting cautious expectations regarding future market demand.
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Analyst Views on SHW
Wall Street analysts forecast SHW stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for SHW is 392.92 USD with a low forecast of 370.00 USD and a high forecast of 422.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
12 Analyst Rating
11 Buy
1 Hold
0 Sell
Strong Buy
Current: 349.600
Low
370.00
Averages
392.92
High
422.00
Current: 349.600
Low
370.00
Averages
392.92
High
422.00
About SHW
The Sherwin-Williams Company is engaged in the manufacture, development, distribution, and sale of paint, coatings and related products to professional, industrial, commercial, and retail customers primarily in North and South America with additional operations in the Caribbean region, Europe, Asia and Australia. Its Paint Stores Group segment is engaged in servicing the needs of architectural and industrial paint contractors and do-it-yourself homeowners. The Consumer Brands Group segment manufactures and distributes a broad portfolio of branded and private-label architectural paint, stains, varnishes, industrial products, wood finishes products, wood preservatives, applicators, corrosion inhibitors, aerosols, caulks and adhesives to retailers, including home centers and hardware stores, dedicated dealers and distributors. The Performance Coatings Group segment develops and sells industrial coatings for wood finishing and general industrial (metal and plastic) applications and others.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Sherwin-Williams Q4 2025 Earnings Call Highlights
- Performance Growth: In 2025, Sherwin-Williams achieved record full-year consolidated sales and adjusted diluted earnings per share, with adjusted EBITDA growing by 13.4%, demonstrating the company's resilience in a challenging market environment.
- Acquisition and Investment: The company completed the acquisition of Suvinil and returned $2.5 billion to shareholders through share repurchases and dividends, indicating its commitment to strategic investments and market share expansion.
- Employee Benefit Restoration: Sherwin-Williams reinstated the 401(k) matching program for U.S. employees, aiming to protect jobs and retain talent, reflecting the company's focus on long-term health.
- Future Outlook: Management expects consolidated sales to grow low to mid-single digits in 2026, with adjusted diluted earnings per share projected between $11.50 and $11.90, indicating cautious optimism for future market conditions.
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Sherwin-Williams Reports Strong Quarterly Earnings Beat
- Quarterly Earnings Beat: Sherwin-Williams reported adjusted earnings per share of $2.23 for Q4, surpassing the analyst consensus of $2.16, indicating a robust profitability trend that is likely to positively influence stock performance.
- Significant Sales Growth: The company achieved quarterly sales of $5.595 billion, exceeding the Street's expectation of $5.544 billion, with Paint Stores Group sales growing 2.7% year-over-year, reflecting stable market demand.
- Gross Margin Dynamics: Gross profit increased from $2.573 billion to $2.712 billion, although gross margin slightly contracted to 48.5%, suggesting some cost control challenges, yet overall profitability remains strong.
- Cautious Future Outlook: The firm anticipates fiscal 2026 adjusted earnings between $11.50 and $11.90 per share, below the market view of $12.42, indicating uncertainty in future market demand, particularly with a projected decline in the new residential market.
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