Stock Analysis | The Sherwin-Williams Outlook - A Mixed Picture with Technical Headwinds

Market Snapshot

Headline takeaway: The stock has risen 1.95% recently, but technical indicators suggest a weak trend, making it a stock to avoid for now.

News Highlights

Recent developments affecting the broader market include:

• Safex Chemicals announces a new manufacturing facility in India: This could signal a shift in chemical production capacity and supply chain dynamics, potentially impacting competitors like Sherwin-Williams. The expansion is expected to add 300 jobs and increase production to 80 metric tons per day.
• U.S. restricts chip design software and chemical exports to China: These trade curbs could disrupt global supply chains and affect chemical and tech sectors. While the direct impact on Sherwin-Williams is unclear, it highlights growing geopolitical tensions.
• ETF industry in Asia-Pacific hits $1.25 trillion: While this is a positive trend for financial markets overall, it doesn’t directly affect Sherwin-Williams, which is more exposed to industrial and consumer goods sectors.

Analyst Views & Fundamentals

Analyst Consensus: The average analyst rating is 3.50 (simple mean), while the performance-weighted rating is 3.24. These scores show a relatively neutral stance among analysts. The ratings are consistent, with both "Buy" and "Neutral" ratings issued recently, aligning with the current price rise of 1.95%.

Fundamental Score: The proprietary model gives Sherwin-Williams a fundamental score of 4.6, suggesting a generally strong financial foundation, albeit with mixed signals.

Key fundamental factors and their scores:

• Net cash flow from operating activities per share (YoY growth rate %): -7.01% (score: 3)
• Total operating revenue (YoY growth rate %): -0.16% (score: 1)
• Total profit / EBIT (%): 88.62% (score: 2)
• Current assets turnover ratio: 1.97x (score: 2)
• Cash-UP: 0.24 (score: 1)
• CFOA: 0.04 (score: 3)
• Cost of sales ratio (%): 51.14% (score: 1)
• Current ratio: 0.78x (score: 2)
• Cash-MV: 0.65 (score: 3)

The mixed performance of key fundamentals—especially weak revenue growth and high cost of sales—points to operational challenges despite strong cash flow and liquidity.

Money-Flow Trends

Big money is moving out of the stock, with block trades showing a negative trend (47.14% inflow ratio). Large and extra-large investors are also withdrawing, with inflow ratios at 47.46% and 47.04%, respectively. In contrast, small retail investors are showing a positive trend (50.92% inflow ratio), suggesting retail optimism at odds with institutional caution.

The overall inflow ratio is 47.68%, indicating a net outflow from the stock, while the fund flow score of 7.8 (internal diagnostic score) suggests this trend is considered "good" by the model.

Key Technical Signals

Technically, the stock is underperforming, with 5 bearish indicators versus 0 bullish. The internal diagnostic score for technical analysis is 3.35, placing it in a weak zone with a clear suggestion to avoid it.

Key indicators and their scores:

• WR Overbought: Internal diagnostic score: 2.02
• Bearish Engulfing: Internal diagnostic score: 6.13
• Marubozu White: Internal diagnostic score: 3.24

Recent chart patterns:

• August 28, 2025: Bearish Engulfing pattern formed, signaling a strong bearish reversal.
• August 19, 2025: WR Overbought and Bullish Engulfing appeared together, showing conflicting signals.
• August 14, 2025: WR Overbought again triggered, suggesting overbought conditions.

These mixed signals point to a volatile and unclear trend, with bearish momentum clearly dominant.

Conclusion

While Sherwin-Williams has strong fundamental metrics and some positive news on the horizon, the technical and sentiment signals are bearish and conflicting. Investors should consider waiting for a clearer trend and monitor upcoming earnings for more directional cues. For now, the stock remains a speculative play with high risk due to its technical weakness and mixed analyst views.