SHW
The Sherwin-Williams Company
$317.30
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Overvalued
Trading 36.1% above fair value
You pay
$317.30
Bear
$186.56
Fair
$233.19
Bull
$279.83
Bear
$186.56
-41.2%
$11.51 × 12x P/E
Fair
$233.19
-26.5%
$11.51 × 15x P/E
Bull
$279.83
-11.8%
$11.51 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
27.6x
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 $374.56 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $233.19 per share.
Warnings
Dividend-based valuation: $259.78 (above our primary estimate by 51%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $374.56 (from 38 analysts). Our estimate is 54% 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