Sherwin-Williams Stock (SHW) Flat YTD Into Earnings: What to Expect

Sherwin-Williams (NYSE: SHW) heads into its Q3 2025 earnings release tomorrow with its stock price close to flat year-to-date, up 0.88%. On a 12 month basis, SHW has fallen 7.48%, as markets have looked elsewhere for value.

This tepid performance during a bullish year for markets masks a year of significant developments for the paint and coatings giant, ranging from strategic acquisitions and dividend hikes to revised earnings forecasts and a “choppy” demand environment. Markets are keenly watching to see if the company can paint a brighter picture for the remainder of the year.

Analysts expect an EPS of $3.44 for the upcoming quarter, slightly higher than $3.37 a year ago, indicating modest earnings growth. Revenue is projected at $6.2 billion, reflecting a marginal 0.57% year-over-year increase, suggesting that sales are expected to remain largely stable.

The most immediate factor weighing on market sentiment is likely the company's lowered full-year adjusted EPS forecast, announced alongside its Q2 2025 results. Adjusted EPS of $3.38 fell short of Wall Street's expectations, and Sherwin-Williams subsequently reduced its full-year guidance to $11.20 – $11.50, citing weaker demand. This news sent the stock down 3.3% on the day, and lingering concerns continue to cast a shadow.

However, it's not all doom and gloom. Sherwin-Williams recently completed the acquisition of BASF's Brazilian architectural paints business, Suvinil, for $1.15 billion. This acquisition brings a $525 million-sales operation and two production facilities, significantly bolstering the company's presence in the crucial Latin American market. The company expects this to contribute positively to financial performance moving forward.

Furthermore, Sherwin-Williams has demonstrated its commitment to returning value to shareholders with a 10.5% increase in its quarterly dividend, marking the 46th consecutive year of dividend increases. This consistent dividend growth is a strong signal of financial stability and confidence in the company's long-term prospects.

The upcoming earnings report will be crucial in determining the near-term trajectory of SHW's stock. Analysts will be closely watching for any signs of improvement in demand, updates on the integration of the Suvinil business, and further details on the company's cost-saving initiatives.

The Flip Side

While the prevailing sentiment appears cautious, bulls point to Sherwin-Williams' current struggles as a buying opportunity. The market may be overreacting to short-term headwinds, overlooking the company's long-term strengths and the potential benefits of its strategic initiatives. The lowered guidance could be a conservative estimate, setting the stage for a positive surprise in future quarters.

Moreover, the company's strong balance sheet and consistent dividend payouts offer a degree of downside protection. Although the technical indicators are currently bearish, they can quickly reverse with positive news flow. Perhaps the market is not focusing enough on the fact that the stock is still up YTD – albeit marginally.

In addition to the headline numbers, one should pay close attention to segment performance. The Paint Stores Group, which caters primarily to professional painters, has shown relative strength, while the Consumer Brands and Performance Coatings segments have lagged. Any shift in these trends could provide valuable insights into the underlying health of the business.