The Sherwin-Williams Outlook - Technical Downturn and Mixed Analyst Signals

Market Snapshot

Takeaway: SHW has experienced a recent price drop of -4.26%, with technical indicators showing a weak trend and analysts offering mixed signals.

News Highlights

Here are a few notable recent developments that could indirectly impact SHW:

• Trump’s Tariff Policy: Recent tariff-related announcements by President Trump have stirred market sentiment and disrupted trade flows. This could affect Sherwin-Williams' global supply chain and material costs.
• Ethereum and Solana ETF Filings: REX Shares has filed for crypto ETFs that could influence investor behavior and capital allocation, potentially affecting broader market risk appetite.
• China’s Slowing Manufacturing: China's PMI dipped slightly to 49.5 in May, still below 50, indicating a contraction in factory activity. A weaker China could slow global demand for paints and coatings, a key sector for SHW.

Analyst Views & Fundamentals

Analyst Consensus: In the last 20 days, two analysts have issued ratings: one Buy (Evercore ISI Group) and one Neutral (B of A Securities). The simple average rating is 3.50, while the weighted rating based on historical performance is 2.67. This suggests some dispersion in analyst views.

The stock is currently in a downward trend, which is aligned with the overall weighted expectation of a neutral stance. This indicates a moderate disconnect between price action and analyst expectations.

Fundamental Highlights: The fundamental model assigns an internal diagnostic score of 5.96 out of 10, suggesting moderate strength in operating performance and liquidity. Key metrics include:

• Net Cash Flow from Operating Activities per Share (YoY growth rate %): -7.01% (score: 3.00)
• Quick Ratio: 48.08% (score: 1.38)
• Total Profit / EBIT %: 88.62% (score: 2.00)
• Net Cash Flow from Operating Activities (YoY growth rate %): -8.09% (score: 3.00)
• CFOA (Cash Flow from Operating Activities): 4.39% (score: 5.96)
• Cost of Sales Ratio %: 51.14% (score: 1.00)
• Equity Multiplier (DuPont): 5.80% (score: 1.00)
• Current Ratio: 78.39% (score: 2.00)
• Cash-MV (Cash to Market Value): 64.75% (score: 3.00)

Money-Flow Trends

The fund-flow patterns show a mixed outlook with overall inflow ratio of 47.56%, but negative trends across large and extra-large investors:

• Small Trend: Positive (inflow ratio: 50.73%)
• Medium Trend: Negative (inflow ratio: 49.76%)
• Large & Extra-Large Trends: Negative (inflow ratios: 48.27% and 46.56% respectively)
• Block Trend: Negative (inflow ratio: 47.12%)

The internal diagnostic score for fund flows is 7.64 (good), indicating strong retail and small-cap inflows, though large institutional flows remain bearish.

Key Technical Signals

Technically, the outlook is weak, with 3 bearish indicators and 0 bullish ones in the last 5 days. The internal technical score is 3.72, and it's advised to avoid the stock.

Recent Chart Patterns (Last 5 Days):

• MACD Golden Cross (09-08): Score: 3.08 (internal strength indicator)
• MACD Death Cross (09-08): Score: 3.70 (bearish signal)
• WR Overbought (09-08): Score: 1.38 (weak momentum)
• WR Oversold (09-10, 09-15, 09-16): Score: 6.72 (positive bias but short-lived)

Key insights include a volatile market and dominance of bearish indicators, suggesting a lack of strong directional momentum.

Conclusion

Actionable Takeaway: Given the weak technical indicators and mixed analyst signals, it may be wise for investors to wait for a clearer trend or pullback before entering or increasing exposure to SHW. While fundamentals remain somewhat stable, the combination of bearish chart patterns and negative institutional flows suggests caution in the near term.