Is The Sherwin-Williams Co. overvalued or undervalued?

As of 13 June 2025, the valuation grade for The Sherwin-Williams Co. has moved from expensive to very expensive, indicating a significant shift in its perceived value. The company is currently overvalued, as evidenced by its P/E ratio of 37, which is higher than the industry average P/E of approximately 34.1. Additionally, the company’s Price to Book Value stands at 24.05, and its EV to EBITDA is 24.72, both suggesting a premium valuation compared to peers.
In comparison, PPG Industries, Inc. has a P/E of 42.72 and an EV to EBITDA of 23.99, indicating that while both companies are considered expensive, The Sherwin-Williams Co. is trading at a lower P/E ratio. However, the PEG ratio of 2.92 further highlights the overvaluation, as it suggests that the stock price is not justified by its earnings growth. Notably, while The Sherwin-Williams Co. has outperformed the S&P 500 over the past year with a return of 14.11% compared to 10.26%, this may not be sustainable given its current valuation metrics.