Sherwin-Williams (SHW) Stock Forecast & Price Target

Sherwin-Williams, as the largest provider of architectural paint in the U.S., demonstrates a solid financial outlook bolstered by an expected $80 million in annual savings from increased restructuring efficiencies phased in during the second half of the year. The company's gross margin improvement of 60 basis points year-over-year, reaching 49.4%, highlights its ability to manage costs effectively despite challenges in plant operating rates. Additionally, the forecasted modest rise in SG&A in the latter half of the year suggests that the company is strategically positioning itself for sustained profitability and operational enhancement moving forward.

Sherwin-Williams has revised its sales outlook for 2025, forecasting a negative or low single-digit growth rate, which marks a significant downgrade from previous projections of positive low single-digit growth. The company's expectations are further impacted by persistent affordability issues and high interest rates, leading to a diminished outlook for both existing and new home sales. Additionally, in a recession scenario, EBITDA is projected to decline approximately 11% from 2024 levels, potentially resulting in an EBITDA of around $3.99 billion, indicating a challenging financial environment ahead.