3 Reasons to Sell SHW and 1 Stock to Buy Instead

3 Reasons to Sell SHW and 1 Stock to Buy Instead

Adam Hejl

Thu, February 19, 2026 at 1:05 PM GMT+9 3 min read

In this article:

SHW

-1.47%

^GSPC

-0.25%

Since August 2025, Sherwin-Williams has been in a holding pattern, posting a small loss of 0.6% while floating around $365.78. The stock also fell short of the S&P 500’s 6.7% gain during that period.

Is there a buying opportunity in Sherwin-Williams, or does it present a risk to your portfolio? Get the full breakdown from our expert analysts, it’s free.

Why Is Sherwin-Williams Not Exciting?

We’re sitting this one out for now. Here are three reasons you should be careful with SHW and a stock we’d rather own.

1. Long-Term Revenue Growth Disappoints

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Regrettably, Sherwin-Williams’s sales grew at a tepid 5.1% compounded annual growth rate over the last five years. This was below our standard for the industrials sector.

Sherwin-Williams Quarterly Revenue

2. Projected Revenue Growth Is Slim

Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite.

Over the next 12 months, sell-side analysts expect Sherwin-Williams’s revenue to rise by 4.2%. Although this projection indicates its newer products and services will fuel better top-line performance, it is still below average for the sector.

3. EPS Barely Growing

Analyzing the long-term change in earnings per share (EPS) shows whether a company’s incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Sherwin-Williams’s unimpressive 6.9% annual EPS growth over the last five years aligns with its revenue performance. On the bright side, this tells us its incremental sales were profitable.

Sherwin-Williams Trailing 12-Month EPS (Non-GAAP)

Final Judgment

Sherwin-Williams isn’t a terrible business, but it doesn’t pass our quality test. With its shares underperforming the market lately, the stock trades at 30.9× forward P/E (or $365.78 per share). Beauty is in the eye of the beholder, but we don’t really see a big opportunity at the moment. We’re fairly confident there are better investments elsewhere. Let us point you toward the most entrenched endpoint security platform on the market.

Stocks We Would Buy Instead of Sherwin-Williams

The market’s up big this year - but there’s a catch. Just 4 stocks account for half the S&P 500’s entire gain. That kind of concentration makes investors nervous, and for good reason. While everyone piles into the same crowded names, smart investors are hunting quality where no one’s looking - and paying a fraction of the price. Check out the high-quality names we’ve flagged in our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 244% over the last five years (as of June 30, 2025).

Stocks that have made our list include now familiar names such as Nvidia (+1,326% between June 2020 and June 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.

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