SHW
The Sherwin-Williams Company
$343.88
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 44.9% above fair value
You pay
$343.88
Bear
$189.86
Fair
$237.33
Bull
$284.79
Bear
$189.86
-44.8%
$11.51 × 12x P/E
Fair
$237.33
-31.0%
$11.51 × 15x P/E
Bull
$284.79
-17.2%
$11.51 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
29.9x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $388.33 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $237.33 per share.
Warnings
Wall Street's average price target is $388.33 (from 38 analysts). Our estimate is 56% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples