Stock Analysis | The Sherwin-Williams Outlook - Mixed Signals Amid Strong Analyst Ratings

Market Snapshot

Headline Takeaway: Sherwin-Williams (SHW) is currently up 4.76% over the recent five-day period, but technical indicators suggest weakness and a bearish bias. Despite strong analyst ratings, traders are cautioned to watch for downside risk.

News Highlights

Here are the top three recent news stories likely to impact SHW:

• New Jersey Reaches $2 Billion Environmental Settlement with DuPont: This settlement over "forever chemicals" may influence investor sentiment in the broader chemical industry, including Sherwin-Williams, which operates in a related sector.
• Trump's Tariff Threat Weighs on Indian Exports: Although not directly related to SHW, Trump’s proposed tariffs on Indian goods may affect global supply chains and trade dynamics that indirectly influence materials and logistics costs for U.S. manufacturers.
• EPA’s Shifting ‘Forever Chemical’ Regulations: Recent federal rollbacks in regulations and the resulting uncertainty in state-level enforcement could affect compliance costs for companies like Sherwin-Williams in the long term.

Analyst Views & Fundamentals

Analyst coverage of SHW has been largely positive in recent weeks. Here's how the ratings break down:

• Simple Average Rating: 4.25
• Historical Performance-Weighted Rating: 4.95
• Rating Consistency: Mixed — there is a 3:1:4 split between "Strong Buy," "Buy," and "Neutral" ratings, showing some dispersion despite the overall optimism.
• Price Trend Alignment: The current price is up 4.76%, aligning with the weighted market expectation for a bullish near-term move.

Key Fundamental Factors and Model Scores:

• Net cash flow from operating activities per share (YoY growth rate %): -7.01% (model score: 3.00)
• PCF (Price to Cash Flow): 30.34 (model score: 3.00)
• Gross profit margin (%): 48.86% (model score: 3.00)
• Total profit / EBIT (%): 88.62% (model score: 2.00)
• Current assets turnover ratio: 1.97 (model score: 3.00)
• Cash-UP (Cash to Undervaluation Premium): 0.61 (model score: 3.00)
• CFOA (Cash Flow to Operating Assets): 0.04 (model score: 4.00)
• Cost of sales ratio (%): 51.14% (model score: 1.00)
• Current ratio: 0.78 (model score: 1.00)
• Cash-MV (Cash to Market Value): 0.59 (model score: 3.00)

Money-Flow Trends

Big-money flows for Sherwin-Williams have shown mixed signals in recent days. The fund-flow score is 7.88 (internal diagnostic score, 0–10), indicating a generally positive trend, but not all sizes of capital flows are in agreement:

• Small-trend: positive, with an inflow ratio of 0.51
• Large-trend: positive, with an inflow ratio of 0.50
• Extra-large-trend: negative, with an inflow ratio of 0.48
• Block-trend: negative, with a block inflow ratio of 0.49

This suggests that while retail and mid-sized investors are still entering the position, large institutional flows and block trading are pulling back or avoiding the stock. A divergence between retail and big-money flows may indicate caution among larger players.

Key Technical Signals

Technical indicators for SHW show a bearish tilt over the past five days:

• WR Overbought (William's %R): 1.87 internal diagnostic score — a bearish signal indicating overbought conditions with a historical win rate of 44.78% and an average return of -0.68%.
• MACD Golden Cross: 3.94 internal diagnostic score — a bullish signal, but not strong enough to offset the overbought warning. Historically, it has a win rate of 50.0% and an average return of 0.54%.

Recent Chart Patterns (5-Day Period):

• 2025-08-01: WR Overbought
• 2025-08-04: WR Overbought + MACD Golden Cross
• 2025-08-06: WR Overbought
• 2025-08-05: WR Overbought
• 2025-08-07: WR Overbought

Key Technical Insight: While the MACD Golden Cross briefly gave a bullish signal on August 4, the repeated overbought readings from WR suggest that SHW is at risk of correcting downward. The technical score is a weak 2.91 (internal diagnostic score, 0–10), indicating a poor trend and reinforcing a cautious stance.

Conclusion

Actionable Takeaway: While Sherwin-Williams is receiving strong ratings from top analysts and is showing solid price action in the short term, the technical indicators are flashing caution. The bearish signals — especially the WR Overbought — suggest the stock may be due for a pullback. Investors might consider waiting for a clearer breakout or a pullback to a key support level before entering long positions. With a technical score of 2.91, now is not the best time to chase higher prices without a safety net.