Sherwin-Williams (SHW) Stock Forecast & Price Target

Sherwin-Williams, as the largest provider of architectural paint in the United States, is positioned for financial improvement, with a projected $80 million in annual savings from ongoing restructuring efforts expected to phase in during the second half of the year. The company's gross margin has increased by 60 basis points year-over-year, reaching 49.4%, indicating efficient cost management despite challenges posed by lower plant operating rates. Additionally, management anticipates improvements in gross margin in the second half compared to the first, suggesting a positive trajectory for profitability.

Sherwin-Williams has revised its sales outlook for 2025, now anticipating low single-digit declines, marking a notable shift from previous expectations of growth. Additionally, persistent higher interest rates and affordability challenges are exerting downward pressure on the housing market, which could further impact demand for the company's products. In the event of a recession, projections indicate a potential decline of approximately 11% in EBITDA from 2024 levels, leading to an estimated EBITDA of around $3.99 billion.