SHW
The Sherwin-Williams Company
$320.94
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 108.3% above fair value
You pay
$320.94
Bear
$123.24
Fair
$154.05
Bull
$184.86
Bear
$123.24
-61.6%
$10.27 × 12x P/E
Fair
$154.05
-52.0%
$10.27 × 15x P/E
Bull
$184.86
-42.4%
$10.27 × 18x P/E
Adjust Assumptions
15.0x
10.27$
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
31.3x
Analyst Consensus (External Reference)
Never blended into the bear/base/bull estimates above.
Average Target (38 analysts)
$391.50
Divergence from AlphaVal
61%
Summary
Applying a 15x P/E to adjusted EPS of $10.27, the base-case value is $154.05 per share. DDM cross-check: $199.80.
Warnings
Dividend-based valuation: $199.80 (above our primary estimate by 30%). Large gaps may signal the dividend doesn't reflect full earning power.
Wall Street's average price target is $391.50 (from 38 analysts). Our estimate is 61% 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