Sherwin-Williams (NYSE:SHW) Shares Gap Down Following Weak Earnings

Key Points

• Sherwin-Williams shares fell sharply, opening at $315.64 versus a prior close of $335.16, after quarterly EPS of $3.63 missed the $3.69 consensus estimate.
• Revenue rose 7.9% year over year to $6.86 billion, exceeding estimates, but higher costs pressured margins and offset the sales beat.
• The company declared a quarterly dividend of $0.80 per share, or $3.20 annually, representing a 1.0% yield and a 29.49% payout ratio.

The Sherwin-Williams Company (NYSE:SHW - Get Free Report)'s stock price gapped down prior to trading on Tuesday after the company announced weaker than expected quarterly earnings. The stock had previously closed at $335.16, but opened at $315.64. Sherwin-Williams shares last traded at $323.2980, with a volume of 309,479 shares trading hands.

The specialty chemicals company reported $3.63 EPS for the quarter, missing the consensus estimate of $3.69 by ($0.06). Sherwin-Williams had a net margin of 11.01% and a return on equity of 67.97%. The company had revenue of $6.86 billion during the quarter, compared to analyst estimates of $6.78 billion. During the same quarter last year, the business earned $3.59 EPS. The firm's revenue for the quarter was up 7.9% on a year-over-year basis.

Sherwin-Williams Dividend Announcement

The company also recently disclosed a quarterly dividend, which will be paid on Friday, December 4th. Investors of record on Friday, November 13th will be issued a dividend of $0.80 per share. The ex-dividend date of this dividend is Friday, November 13th. This represents a $3.20 annualized dividend and a yield of 1.0%. Sherwin-Williams's payout ratio is currently 29.49%.

Key Sherwin-Williams News

Here are the key news stories impacting Sherwin-Williams this week:

• Positive Sentiment: Third-quarter revenue increased 7.9% year over year to $6.86 billion, exceeding analyst estimates of approximately $6.78 billion. The sales performance indicates continued demand across Sherwin-Williams’ business despite cost pressures. SHW Q3 Earnings Lag Estimates on Higher Costs, Sales Beat
• Positive Sentiment: Evercore ISI upgraded SHW to Outperform ahead of the earnings release, providing a supportive analyst view of the company’s longer-term prospects. Evercore ISI Upgrades Sherwin-Williams to Outperform
• Neutral Sentiment: Management projected 2026 adjusted earnings per share of $11.85 to $12.15. The range brackets the FactSet consensus estimate of $12.09, but its midpoint is slightly below expectations, limiting the positive impact of the guidance. Sherwin-Williams Expects 2026 Adjusted EPS Range
• Negative Sentiment: Third-quarter adjusted EPS was $3.63, below consensus estimates ranging from $3.65 to $3.69, although it improved from $3.59 a year earlier. The miss ended the company’s recent earnings-beat streak and raised concerns about profitability. Sherwin-Williams Stock Drops on Earnings Miss
• Negative Sentiment: Higher costs pressured margins, offsetting the revenue beat. With Sherwin-Williams trading at a relatively elevated earnings multiple, investors appear particularly sensitive to evidence that input and operating-cost inflation could restrict future earnings growth. Sherwin-Williams Q3 Earnings Miss Estimates

Analyst Ratings Changes

SHW has been the subject of several research reports. JPMorgan Chase & Co. lifted their price target on Sherwin-Williams from $365.00 to $380.00 and gave the stock an "overweight" rating in a research note on Wednesday, July 29th. Argus increased their price objective on shares of Sherwin-Williams from $355.00 to $380.00 in a research note on Thursday, August 27th. Stephens dropped their target price on shares of Sherwin-Williams from $375.00 to $353.00 and set a "hold" rating for the company in a report on Tuesday, September 22nd. Weiss Ratings upgraded shares of Sherwin-Williams from a "hold (c+)" rating to a "buy (b-)" rating in a research report on Friday, October 9th. Finally, BMO Capital Markets restated an "outperform" rating on shares of Sherwin-Williams in a research report on Monday, September 28th. One equities research analyst has rated the stock with a Strong Buy rating, sixteen have given a Buy rating and ten have given a Hold rating to the company's stock. Based on data from MarketBeat, the stock currently has a consensus rating of "Moderate Buy" and a consensus price target of $381.17.

Insider Transactions at Sherwin-Williams

In other Sherwin-Williams news, insider Karl Jorgenrud sold 7,886 shares of the firm's stock in a transaction dated Friday, August 7th. The shares were sold at an average price of $368.30, for a total transaction of $2,904,413.80. Following the sale, the insider directly owned 11,944 shares of the company's stock, valued at $4,398,975.20. This trade represents a 39.77% decrease in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through this link. Also, insider Justin T. Binns sold 13,500 shares of Sherwin-Williams stock in a transaction dated Monday, August 17th. The stock was sold at an average price of $352.70, for a total transaction of $4,761,450.00. Following the sale, the insider owned 21,937 shares of the company's stock, valued at approximately $7,737,179.90. This trade represents a 38.10% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. 0.23% of the stock is currently owned by corporate insiders.

Institutional Trading of Sherwin-Williams

Several hedge funds and other institutional investors have recently bought and sold shares of SHW. Caisse de depot et placement du Quebec purchased a new position in Sherwin-Williams during the second quarter worth approximately $5,473,000. Milestone Asset Management LLC purchased a new stake in shares of Sherwin-Williams during the 3rd quarter valued at $3,153,000. William John Sempolinski purchased a new stake in shares of Sherwin-Williams during the 2nd quarter valued at $2,456,000. BlackRock Inc. acquired a new stake in shares of Sherwin-Williams during the 2nd quarter worth $6,100,083,000. Finally, Royal Bank of Canada increased its holdings in shares of Sherwin-Williams by 9.8% during the 1st quarter. Royal Bank of Canada now owns 966,561 shares of the specialty chemicals company's stock worth $309,832,000 after buying an additional 86,254 shares during the last quarter. 77.67% of the stock is owned by hedge funds and other institutional investors.

Sherwin-Williams Stock Down 3.4%

The company has a current ratio of 0.73, a quick ratio of 0.46 and a debt-to-equity ratio of 2.16. The firm has a market capitalization of $78.63 billion, a PE ratio of 29.80, a price-to-earnings-growth ratio of 2.63 and a beta of 1.08. The firm has a 50-day moving average of $331.59 and a two-hundred day moving average of $333.53.

Sherwin-Williams Company Profile

The Sherwin-Williams Company NYSE: SHW develops, manufactures, distributes and sells paints, coatings and related products. Its offerings include architectural paints, industrial coatings, wood finishes, protective coatings, automotive refinishing products, floor coatings and related supplies marketed under brands such as Sherwin-Williams, Valspar, Minwax, Krylon and Dutch Boy.

Founded in 1866 and headquartered in Cleveland, Ohio, Sherwin-Williams serves professional contractors, do-it-yourself consumers, industrial manufacturers, commercial businesses and other customers.

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