Sherwin Williams is positioning itself smartly

Sherwin-Williams has quietly crushed it over the past year—even in a housing market that’s felt like climbing uphill with ankle weights: interest rates soaring, affordability plummeting, and inventory scarce.

Yet homeowners aren't hesitating to repaint, especially with those pandemic-era colors starting to fade.

Interestingly, several of Sherwin-Williams' rivals have dropped out or scaled back, handing more market share to the Cleveland-based giant. Plus, with production mostly local, Sherwin-Williams sidesteps some of the headaches tied to tariffs.

The stock is up roughly 23% over the past year, recently trading around $360.73, outpacing even the S&P 500 in 2025. Tough conditions seem to only highlight Sherwin-Williams' strengths.

Analyst Joseph Ghio from Williams Jones Wealth Management nails it: "I still love Sherwin-Williams. Even with a weak housing market, they're protecting margins and grabbing market share. While competitors retreat, Sherwin accelerates—opening new stores and picking up customers as others falter."

The real kicker could be if the Fed eases up on rates in 2025, unlocking pent-up housing demand. With North America short around five million homes, any uptick could send Sherwin's earnings soaring. Their smart logistics and innovative paints—requiring fewer coats and cutting contractor costs—only sweeten the deal. While we never invest based on factors we can't control, it's a great business that's could get an extra tailwind with the change.

Andrew Choi at Parnassus Investments points out Sherwin's consistent business upgrades—digitizing operations, modernizing stores, and enhancing training—are finally paying off with better margins and stronger market positioning.

And competition? Well, PPG sold off some business lines, Kelly-Moore Paints shut down entirely, and Sherwin-Williams continues investing, leaving them poised to dominate.

However, the stock isn't cheap at about 29 times forward earnings, but consider this: factoring out current upfront investment costs, real earnings power might be closer to $14 per share, dropping that multiple down to around 26 times—not outrageous by historical standards.

Tariffs? Not a big worry here. Sherwin-Williams produces domestically, avoiding much of the overseas supply-chain mess. They're also stepping up environmentally, aiming to source half their electricity from renewables by 2030, alongside reducing waste and emissions.