Sherwin-Williams falls 2.7% after quarterly earnings miss and cost pressures

What happened

Sherwin-Williams (SHW) fell 2.7% on October 27, 2026, after third-quarter earnings missed expectations and management flagged higher costs and 2027 savings plans. The stock opened 5.8% below the previous close and ended the session at $326.01, with trading volume 2.1 times its 20-day average. The move came as the S&P 500 rose 0.6% and the Basic Materials sector median rose 1.9%.

How big was the move

The decline was 1.8 times a typical daily move for this stock and was 4.7 percentage points worse than the sector median on the day. Over five sessions the stock fell 3.0%, while the S&P 500 rose 0.1%. In the past five years the stock had 48 sessions with a decline of at least 2.7%; twenty trading days later the median result was a gain of 3.0%, and 31 of 48 were higher. The stock’s market sensitivity is modest: it has a beta of 0.68, so it tends to move less than the market.

The technical picture

The stock sat near a short-term downtrend, trading 0.4% below its 20-day moving average, 1.4% below its 50-day moving average and 2.1% below its 200-day moving average. The 50-day average is below the 200-day average, a sign of a weak longer-term trend. The Relative Strength Index (14 days) was 46, in a neutral range between 30 and 70. The stock was 13.7% below its 52-week high and had fallen 2.0% over one month and 5.2% over three months. Over one year the stock fell 2.4%, trailing the S&P 500 by 16.1 percentage points. Sixty-day volatility annualized at 24%, higher than 54% of its own readings over five years.

Fundamentals and valuation

On a trailing four-quarter basis through September 30, 2026, the company reported revenue of $24.91 billion, which grew 7.0% from a year earlier, and diluted earnings per share of $10.88, which rose 6.1% from a year earlier. Gross margin was 48.7% compared with 48.9% a year earlier, while operating margin was 16.2% versus 15.9% a year earlier. Free-cash-flow margin stood at 12.4% and return on invested capital was 14.3%. The balance sheet showed net debt of 3.0 times EBITDA, and share count over one year decreased by 2.5%.

Valuation measures showed a price to trailing earnings of 30.0 times trailing earnings and price to forward earnings of 27.0 times expected earnings. The stock’s price to trailing earnings is lower than 76% of its own readings over the past five years, where the five-year median is 33.2 times earnings. Free-cash-flow yield was 3.8%.

Those margins and returns indicate the company continues to generate healthy cash from operations, even as gross margin held roughly steady year over year and operating margin ticked higher. The net debt of 3.0 times EBITDA points to leverage that management and analysts will watch, particularly given the company’s plan to pursue structural cost savings in 2027.

PromtFinance scores placed the company in the sector as follows: Value 46 (Neutral), Growth 64 (Neutral), Quality 68 (Positive), Momentum 54 (Neutral), Revisions 20 (Very weak) and Stability 87 (Strong). The high Stability score reflects steady cash generation and the decline in share count, while a low Revisions score signals analysts have reduced forecasts recently.

Earnings and analyst expectations

Sherwin-Williams reported quarterly earnings on October 27, 2026, of $3.63 per share, 1.6% below the Zacks Consensus Estimate of $3.65, and the miss along with higher costs was cited as a driver of the session’s decline. The third-quarter results showed high-single-digit consolidated sales growth driven by mid-single-digit gains from price/mix, modest contributions from acquisitions and volume growth for the third consecutive quarter. Management outlined expected structural cost savings of $75 million in 2027.

Consecutive quarters beating estimates was 0, while the average surprise over the last four reports was 2.6% above estimates. Typical two-day reactions after recent reports had been a rise of 1.8%.

Thirty-eight analysts covered the stock, with 58% rated it Buy or Strong Buy and the consensus rating at Buy. The consensus price target was $383.64, which was 17.7% above the closing price on October 27, 2026. That gap between the market price and consensus target underscores differing views on how quickly cost pressures will be offset by pricing, volume and planned savings.

What to watch

• Next report: February 4, 2027.
• The company’s outlined expected structural cost savings of $75 million in 2027.
• Balance sheet leverage: net debt of 3.0 times EBITDA.
• Valuation: price to trailing earnings of 30.0 times trailing earnings and price to forward earnings of 27.0 times expected earnings.
• Consensus price target: $383.64, 17.7% above the closing price.