The Sherwin-Williams Company (SHW): analysis and signal as of September 4, 2026

Published on September 5, 2026 at 19:30 · Updated on September 5, 2026 at 19:30 · by Aurélien Ambert, QDNA

Exchange : NYSE · Sector : Process Industries

In short

The signal established for Sherwin-Williams on 4 September 2026 is weak, with a three out of three vote. The principal reason is the absence of verification of the results for the first two quarters of 2026 and a negative short-term dynamic, despite the structural quality of the company.

Current signal: weak (vote 3/3)
Deterministic score: +0.5 → signal expected by the scale : weak (September 10, 2026)
Layers: fundamentals : neutral, price : neutral, risks : neutral

Triggered rules

Rule	Weight
penalizes an asset whose net debt/EBITDA exceeds the threshold, and the use of leverage (margin/lombard)	-2.5
favors a high and durable return on invested capital (ROIC), a marker of a lasting moat	+2.0
penalizes direct holding of US securities in a CTO (US estate tax at death), favors a UCITS ETF domiciled in IE	-1.0
favors high gross profitability (gross profit / assets), a robust predictor of returns	+1.0
moderately favors an asset with robust operating profitability (RMW factor), cross-check with accounting quality (possible manipulation)	+0.5
moderately favors a positive 12-1 month momentum (tailwind), BUT guardrail: costly rotation, long-term reversal, momentum crashes, a conviction signal, not a rotation trigger	+0.5

Thesis

Sherwin-Williams is a superior-quality franchise, with a vertically integrated model, a Dividend Aristocrat status for over twenty-five years, annual pricing power of four to five per cent and a cash-flow conversion exceeding net income. This profile justifies a structurally positive fundamental signal. The current context, however, applies a macroeconomic penalty to rate-sensitive stocks, and the exposure to the American housing cycle, via building permits, housing starts and renovations, maintains a neutral short-term reading. The absence of verification of the first and second quarter 2026 reports, combined with unfavourable momentum below the 50-day moving average and negative monthly momentum, ultimately explains a weak signal.

Bull case

The operating model is defensible over a twenty-year horizon. The network of more than four thousand company-owned stores ensures integrated distribution. Historical pricing power, a margin higher than that of peers thanks to vertical integration, and the indirect exposure to federal expenditures from the IRA and the IIJA in industrial coatings support growth. The integration of Valspar, mature since 2017, also contributes to synergies. These elements argue for a high defensive quality.

Bear case

The structural sensitivity to rates, via the American housing market, constitutes the main weak point. Monetary policy, with a range of 3,50 to 3,75 per cent and a ten-year to two-year curve slope of plus 0,43 points, reinforces this constraint. The margin compression of 2024 is not resolved according to guidance. The cash-flow signature is fragile. The cumulative positive premarket spread of 58,6 per cent contrasts with an intraday performance of minus 41,3 per cent over two years. Five-day volumes contract by 24,8 per cent. No positive structural lever is emerging in the short term in the macroeconomic regime.

Scenarios

Three scenarios are possible. The bullish scenario, with a probability of 25 per cent, assumes a recovery of the existing-home market, preserved pricing power and an upward revision of the guidance for fiscal year 2026. The central scenario, with a probability of 50 per cent, foresees a sideways movement pending the quarterly results and the clarification of the Federal Reserve's calendar. The bearish scenario, with a probability of 25 per cent, describes new margin compression, a persistent housing slowdown and a sector rotation away from the stock, with the trend invalidated by a break of the 200-day moving average.

Risks

The stock remains vulnerable to changes in interest rates, because of its exposure to the American housing cycle. A continuation of the margin compression, a prolonged housing market slowdown or a sector rotation would reduce the attractiveness of the stock. The absence of verification of the results for the first two quarters of the current fiscal year adds accounting uncertainty. The recent weakness in volumes and the divergence between premarket performance and intraday performance signal liquidity fragility.

Market positioning (short sellers)

Short interest / shares outstanding: 2.85 %
Days to cover: 3.67
Settlement date: 2026-08-14
Source: FINRA (disseminated on 2026-08-26)

Market information published by FINRA (consolidated short interest, all venues), no directional comment.

Signal history (last 12 months)

Date	Signal	New fact
September 4, 2026	weak (3/3)	not published

Frequently asked questions

Why is the signal for Sherwin-Williams weak despite the franchise's quality?

The operational quality of Sherwin-Williams is real, but the signal incorporates several unfavourable elements. The company is exposed to the American housing cycle, penalised by interest rates. The reports for the first two quarters of 2026 have not been verified. The stock is below its 50-day moving average, and its monthly momentum is negative. The macroeconomic context provides no positive driver, which maintains a weak signal.

What is the impact of the rate environment on Sherwin-Williams?

The rate environment weighs on rate-sensitive securities via the American housing market. Current monetary policy, with a range of 3,50 to 3,75 per cent, raises the cost of mortgage credit. This affects building permits, housing starts and renovation spending. The slope of the yield curve between ten-year and two-year maturities, at plus 0,43 points, accentuates this constraint on the real estate cycle.

Which signals show fragility in market dynamics?

Market dynamics exhibit several signs of fragility. The cumulative positive premarket gap of 58,6 per cent contrasts with a negative intraday performance of 41,3 per cent over two years. Five-day volumes are down by 24,8 per cent, indicating a contraction of interest. The stock is also below its 50-day moving average and exhibits negative monthly momentum.

What elements could justify an improvement of the signal?

A recovery of the existing-home market, the preservation of pricing power and an upward revision of the guidance for fiscal year 2026 would constitute favourable elements. Clarification of the Federal Reserve's monetary calendar and verification of the results for the first two quarters of the fiscal year would reduce uncertainty. These factors could modify the structurally positive reading of the franchise.

Is Sherwin-Williams exposed to American public spending?

Yes, indirectly. Sherwin-Williams's industrial coatings benefit from federal spending under the IRA and the IIJA. This exposure is, however, indirect and does not, in the short term, offset the weakness of the residential real estate cycle, the main outlet for paint and coating demand. It confers modest structural support, without altering the current rate regime.

Sources

The official filings below are the issuer's own, matched to this stock by its identifier (LEI, CIK or ISIN). The figures quoted above come from an automated arbitration: they have not been re-checked one by one.

July 28, 2026 — 2.02 Results of Operations and Financial Condition; 9.01 Financial Statements and Exhibits (SEC · 8-K)
July 28, 2026 — 10-Q (SEC · 10-Q)
April 28, 2026 — 2.02 Results of Operations and Financial Condition; 9.01 Financial Statements and Exhibits (SEC · 8-K)
April 28, 2026 — 10-Q (SEC · 10-Q)

Automated AI analysis: limitations and transparency

This content is an automated analysis produced using artificial intelligence. Personal analysis for information purposes — no personalised investment advice. MMR content consists of general research. It does not take account of your financial circumstances, objectives or risk tolerance. Data, analyses and results, including those produced using artificial intelligence, may contain errors, be incomplete or become outdated. No return or outcome is guaranteed. All investments carry a risk of partial or total loss of capital. Past performance and simulations do not predict future results. Before making any decision, check information against original sources and, where necessary, consult an authorised professional. You remain responsible for your investment decisions. This notice does not exclude or limit any liability that cannot legally be excluded or limited.
Tool and analysis: QDNA, Aurélien Ambert.
Analysis (arbitration) completed on September 4, 2026; this page was completed on September 5, 2026 at 19:30 (UTC).
Interests: no position in the stock analysed (SHW) is recorded in the data consulted on September 12, 2026 (UTC). This does not confirm the absence of holdings or other interests. The situation at the analysis publication date has not been reconstructed.
This declaration covers only recorded positions in this stock; it is not an exhaustive verification of other interests or remuneration.
Methodology: analysis chain, score formula and scale described on the public methodology page.
Analysis horizon: 2035.