Is The Sherwin-Williams Co. overvalued or undervalued?

As of 13 August 2025, the valuation grade for The Sherwin-Williams Co. moved from very expensive to expensive, indicating a shift in perception regarding its valuation. The company is currently considered overvalued based on its financial metrics. The P/E ratio stands at 37, which is higher than the peer average of 38.53, while the EV to EBITDA ratio is 24.72, also above the peer average of 26.02. Additionally, the PEG ratio is at 2.92, suggesting that the stock may be overvalued relative to its growth prospects.
In comparison to its peers, The Sherwin-Williams Co. exhibits a higher P/E ratio than the industry average, which reinforces the notion of overvaluation. The company's recent stock performance has lagged behind the S&P 500, with a 1-year return of -6.86% compared to the S&P 500's 17.14%, and a 5-year return of 50.78% versus the S&P 500's 96.61%. This underperformance further supports the conclusion that the stock is overvalued in its current state.