In a housing market weighed down by elevated mortgage rates, affordability concerns, and sluggish sales, Sherwin-Williams (NYSE:SHW) has quietly staged a turnaround that’s turning heads on Wall Street. Despite macro headwinds, the Cleveland-based paints and coatings company has seen its stock climb nearly 23% over the past year and has outperformed the S&P 500 in 2025. Recent developments such as the strategic acquisition of BASF’s Suvinil business in Brazil, robust performance in residential repaint, and gains in market share due to competitor pullbacks have reinforced Sherwin-Williams’ resilience. Even as homebuilders scale back and existing home sales remain subdued, demand for repainting continues to show strength, acting as a counter-cyclical tailwind. Let us analyze the key factors that make Sherwin-Williams an excellent play in the current, turbulent housing landscape.
Resilience In Residential Repaint & Market Share Expansion
Sherwin-Williams’ Paint Stores Group (PSG), which heavily serves the professional painting contractor market, has emerged as a major strength for the company. In a housing market where existing home sales are weak, residential repaint has remained a bright spot. PSG posted mid-single-digit sales growth in repainting during Q1 2025, supported by disciplined SG&A spending and store expansion. Volume growth in this segment outpaced the broader market, indicating clear market share gains. Contractors appear to be favoring Sherwin-Williams due to its quick delivery times, data-driven recommendations, and integrated paint systems like the Gallery Series, which support productivity on the job site. These advantages allow Sherwin-Williams to help contractors complete smaller repainting projects faster — an increasingly appealing option for homeowners unwilling or unable to undertake larger renovations or move amid high mortgage rates. The segment also benefits from a 4–6 week project backlog, offering near-term revenue visibility. With repainting considered a low-cost alternative to larger home improvements, the trend is less impacted by interest rates and more reliant on consumer sentiment and aesthetics. Notably, Sherwin-Williams has also focused on onboarding new repaint contractors and improving contractor retention, deepening its competitive moat. This has helped the company grow volumes even as the overall market remains flat or slightly down, providing a stable revenue stream in an otherwise choppy macro environment.
Aggressive Strategic Investments & Digital Transformation
Sherwin-Williams has doubled down on long-term investments, even as many peers have scaled back due to macroeconomic uncertainty. The company continues to open new stores at a rapid pace, with 18 store launches in Q1 and plans to open 80–100 stores by year-end. This brick-and-mortar expansion is complemented by modernization efforts across systems and logistics, which are already yielding margin benefits. Administrative SG&A expenses were down by mid-teens in Q1, reflecting returns on digital and process streamlining efforts. The company has also controlled spending in areas such as travel, third-party consultants, and CapEx, allowing it to redeploy savings toward growth initiatives. Sherwin-Williams has invested heavily in supply chain efficiency and warehouse automation, enabling faster deliveries and better inventory management, both crucial to serving time-sensitive contractors. Moreover, the company’s controlled store model, in-house salesforce training, and proprietary data analytics give it the ability to adapt pricing, inventory, and sales strategy in real time. These measures not only support near-term margin expansion but also position the company for rapid scale-up when housing market conditions improve. Notably, the Paint Stores Group segment margin improved by 120 basis points to 18.4% in Q1, even as volumes declined, signaling operating leverage and cost discipline.
Low Tariff Exposure & Pricing Flexibility Amid Inflation Pressures
Sherwin-Williams has been relatively insulated from global supply chain and tariff shocks, due to its highly localized manufacturing and sourcing model. Approximately 80% of its consolidated revenue is U.S.-based, with less than 2% exposure to China. Most raw materials are procured within the region of manufacturing, limiting exposure to international logistics disruptions and import tariffs. While tariffs on pigments, industrial resins, and packaging are starting to impact certain cost inputs, management remains confident in its ability to offset these with price increases and internal efficiencies. The company implemented a price increase in January 2025 and is seeing strong pricing effectiveness, particularly in its Paint Stores Group. Although pricing contribution will decelerate in the coming quarters as past increases are annualized, Sherwin-Williams has not ruled out additional price hikes in select business units if input inflation continues. Furthermore, management stressed that price actions would be disciplined and based on observed cost pressures rather than speculative moves. This flexibility, combined with SG&A and working capital discipline, creates room to protect margins even if raw material costs inch higher. In Q1, adjusted gross margin improved despite flat volumes, driven largely by pricing and supply chain improvements, underlining the effectiveness of the company’s approach to managing inflation.
M&A-Led International Expansion & Portfolio Diversification
Sherwin-Williams’ recent agreement to acquire Suvinil, BASF’s architectural coatings business in Brazil, marks a significant step in its international expansion. This acquisition complements its existing Latin American footprint and provides access to one of the region’s strongest coatings brands in a structurally growing market. While the transaction is expected to close in the second half of 2025 and is not yet included in the company’s full-year guidance, management is already outlining a playbook modeled on the successful Valspar integration. Suvinil’s growth has consistently outpaced Brazil’s GDP and the broader coatings market, offering an opportunity to scale Sherwin-Williams' presence in a fragmented but expanding region. The leadership team has highlighted potential synergies in branding, operations, and channel management, although details remain undisclosed. This acquisition also aligns with Sherwin-Williams' goal to diversify revenue sources and reduce cyclicality by expanding into higher-growth international markets. Beyond M&A, the company is also seeing strong momentum in its protective and marine coatings business, which posted high single-digit growth in Q1 due to strength in oil and gas, water infrastructure, and industrial flooring. As competitors like PPG divest or downsize, Sherwin-Williams continues to gain share in niche but profitable segments, expanding its reach and reducing dependence on the core U.S. housing cycle.
Final Thoughts
Source: Yahoo Finance
As we can see in the above chart, Sherwin-Williams’ stock trajectory has been more or less flat over the past few months. However, this might change soon as the management has guided for earnings to grow by over 11% in 2026 and continues to emphasize margin expansion through digital investments and supply chain efficiencies. A string of solid quarterly results could lead to a massive uptick in the stock price. It is important to highlight that Sherwin Williams’ performance amidst a challenging housing market is a testament to its disciplined strategy, market share gains, and operational resilience. The company has shown an ability to grow margins, expand its store network, and make accretive acquisitions, all while navigating raw material inflation and uncertain demand. Its localized supply chain and focus on repainting and infrastructure projects provide a solid buffer against housing-related volatility. We believe that the company is strategically positioned for robust long-term growth.