Intrinsic value of Sherwin-Williams - SHW

Previous Close

$333.43

  Intrinsic Value

$310.16

stock screener

  Rating & Target

hold

-7%

  Value-price divergence*

+92%

Previous close

$333.43

 
Intrinsic value

$310.16

 
Up/down potential

-7%

 
Rating

hold

 
Value-price divergence*

+92%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of SHW stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 30.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  4.56
  7.30
  7.07
  6.86
  6.68
  6.51
  6.36
  6.22
  6.10
  5.99
  5.89
  5.80
  5.72
  5.65
  5.58
  5.53
  5.47
  5.43
  5.38
  5.35
  5.31
  5.28
  5.25
  5.23
  5.20
  5.18
  5.17
  5.15
  5.13
  5.12
  5.11
Revenue, $m
  11,856
  12,721
  13,621
  14,556
  15,528
  16,538
  17,590
  18,684
  19,824
  21,011
  22,249
  23,540
  24,887
  26,293
  27,761
  29,296
  30,899
  32,576
  34,330
  36,164
  38,085
  40,096
  42,202
  44,407
  46,718
  49,140
  51,678
  54,338
  57,128
  60,053
  63,121
Variable operating expenses, $m
 
  9,635
  10,308
  11,008
  11,735
  12,491
  13,279
  14,098
  14,951
  15,840
  16,766
  17,620
  18,628
  19,680
  20,779
  21,928
  23,128
  24,383
  25,695
  27,069
  28,506
  30,011
  31,588
  33,239
  34,968
  36,781
  38,681
  40,672
  42,760
  44,950
  47,246
Fixed operating expenses, $m
 
  1,184
  1,213
  1,244
  1,275
  1,307
  1,339
  1,373
  1,407
  1,442
  1,478
  1,515
  1,553
  1,592
  1,632
  1,673
  1,715
  1,757
  1,801
  1,846
  1,893
  1,940
  1,988
  2,038
  2,089
  2,141
  2,195
  2,250
  2,306
  2,364
  2,423
Total operating expenses, $m
  10,116
  10,819
  11,521
  12,252
  13,010
  13,798
  14,618
  15,471
  16,358
  17,282
  18,244
  19,135
  20,181
  21,272
  22,411
  23,601
  24,843
  26,140
  27,496
  28,915
  30,399
  31,951
  33,576
  35,277
  37,057
  38,922
  40,876
  42,922
  45,066
  47,314
  49,669
Operating income, $m
  1,740
  1,903
  2,100
  2,304
  2,518
  2,740
  2,972
  3,214
  3,466
  3,729
  4,005
  4,405
  4,706
  5,021
  5,350
  5,695
  6,057
  6,436
  6,833
  7,249
  7,686
  8,144
  8,626
  9,131
  9,661
  10,218
  10,802
  11,417
  12,062
  12,740
  13,453
EBITDA, $m
  1,938
  2,131
  2,335
  2,549
  2,771
  3,002
  3,243
  3,495
  3,758
  4,032
  4,318
  4,618
  4,931
  5,258
  5,601
  5,960
  6,336
  6,730
  7,143
  7,576
  8,030
  8,507
  9,007
  9,532
  10,083
  10,661
  11,269
  11,908
  12,578
  13,283
  14,023
Interest expense (income), $m
  154
  96
  120
  144
  170
  197
  225
  254
  284
  315
  348
  382
  418
  455
  493
  534
  576
  620
  666
  715
  765
  818
  874
  932
  992
  1,056
  1,123
  1,193
  1,266
  1,343
  1,423
Earnings before tax, $m
  1,595
  1,807
  1,980
  2,160
  2,348
  2,543
  2,747
  2,960
  3,182
  3,414
  3,657
  4,023
  4,288
  4,566
  4,857
  5,161
  5,481
  5,815
  6,166
  6,534
  6,921
  7,326
  7,752
  8,199
  8,668
  9,162
  9,680
  10,224
  10,796
  11,397
  12,029
Tax expense, $m
  462
  488
  535
  583
  634
  687
  742
  799
  859
  922
  987
  1,086
  1,158
  1,233
  1,311
  1,394
  1,480
  1,570
  1,665
  1,764
  1,869
  1,978
  2,093
  2,214
  2,340
  2,474
  2,614
  2,761
  2,915
  3,077
  3,248
Net income, $m
  1,133
  1,319
  1,445
  1,577
  1,714
  1,856
  2,005
  2,161
  2,323
  2,492
  2,669
  2,937
  3,130
  3,333
  3,545
  3,768
  4,001
  4,245
  4,501
  4,770
  5,052
  5,348
  5,659
  5,985
  6,328
  6,688
  7,066
  7,464
  7,881
  8,320
  8,781

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  890
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  6,753
  6,292
  6,736
  7,199
  7,679
  8,179
  8,699
  9,240
  9,804
  10,391
  11,004
  11,642
  12,308
  13,004
  13,730
  14,488
  15,281
  16,111
  16,978
  17,886
  18,835
  19,830
  20,871
  21,962
  23,105
  24,303
  25,558
  26,874
  28,253
  29,700
  31,217
Adjusted assets (=assets-cash), $m
  5,863
  6,292
  6,736
  7,199
  7,679
  8,179
  8,699
  9,240
  9,804
  10,391
  11,004
  11,642
  12,308
  13,004
  13,730
  14,488
  15,281
  16,111
  16,978
  17,886
  18,835
  19,830
  20,871
  21,962
  23,105
  24,303
  25,558
  26,874
  28,253
  29,700
  31,217
Revenue / Adjusted assets
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
  2.022
Average production assets, $m
  1,324
  1,425
  1,526
  1,630
  1,739
  1,852
  1,970
  2,093
  2,220
  2,353
  2,492
  2,636
  2,787
  2,945
  3,109
  3,281
  3,461
  3,648
  3,845
  4,050
  4,266
  4,491
  4,727
  4,974
  5,232
  5,504
  5,788
  6,086
  6,398
  6,726
  7,070
Working capital, $m
  798
  700
  749
  801
  854
  910
  967
  1,028
  1,090
  1,156
  1,224
  1,295
  1,369
  1,446
  1,527
  1,611
  1,699
  1,792
  1,888
  1,989
  2,095
  2,205
  2,321
  2,442
  2,569
  2,703
  2,842
  2,989
  3,142
  3,303
  3,472
Total debt, $m
  1,953
  1,514
  1,827
  2,153
  2,492
  2,844
  3,211
  3,593
  3,990
  4,404
  4,836
  5,286
  5,755
  6,245
  6,757
  7,292
  7,851
  8,436
  9,047
  9,687
  10,357
  11,058
  11,792
  12,561
  13,367
  14,211
  15,096
  16,024
  16,997
  18,016
  19,086
Total liabilities, $m
  4,874
  4,436
  4,749
  5,075
  5,414
  5,766
  6,133
  6,515
  6,912
  7,326
  7,758
  8,208
  8,677
  9,167
  9,679
  10,214
  10,773
  11,358
  11,969
  12,609
  13,279
  13,980
  14,714
  15,483
  16,289
  17,133
  18,018
  18,946
  19,919
  20,938
  22,008
Total equity, $m
  1,878
  1,856
  1,987
  2,124
  2,265
  2,413
  2,566
  2,726
  2,892
  3,065
  3,246
  3,434
  3,631
  3,836
  4,050
  4,274
  4,508
  4,753
  5,009
  5,276
  5,556
  5,850
  6,157
  6,479
  6,816
  7,169
  7,540
  7,928
  8,335
  8,761
  9,209
Total liabilities and equity, $m
  6,752
  6,292
  6,736
  7,199
  7,679
  8,179
  8,699
  9,241
  9,804
  10,391
  11,004
  11,642
  12,308
  13,003
  13,729
  14,488
  15,281
  16,111
  16,978
  17,885
  18,835
  19,830
  20,871
  21,962
  23,105
  24,302
  25,558
  26,874
  28,254
  29,699
  31,217
Debt-to-equity ratio
  1.040
  0.820
  0.920
  1.010
  1.100
  1.180
  1.250
  1.320
  1.380
  1.440
  1.490
  1.540
  1.590
  1.630
  1.670
  1.710
  1.740
  1.780
  1.810
  1.840
  1.860
  1.890
  1.920
  1.940
  1.960
  1.980
  2.000
  2.020
  2.040
  2.060
  2.070
Adjusted equity ratio
  0.176
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295
  0.295

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  1,133
  1,319
  1,445
  1,577
  1,714
  1,856
  2,005
  2,161
  2,323
  2,492
  2,669
  2,937
  3,130
  3,333
  3,545
  3,768
  4,001
  4,245
  4,501
  4,770
  5,052
  5,348
  5,659
  5,985
  6,328
  6,688
  7,066
  7,464
  7,881
  8,320
  8,781
Depreciation, amort., depletion, $m
  198
  228
  236
  244
  253
  262
  272
  281
  292
  302
  314
  213
  225
  237
  251
  265
  279
  294
  310
  327
  344
  362
  381
  401
  422
  444
  467
  491
  516
  542
  570
Funds from operations, $m
  1,121
  1,547
  1,681
  1,821
  1,967
  2,119
  2,277
  2,442
  2,615
  2,795
  2,983
  3,149
  3,355
  3,571
  3,796
  4,032
  4,280
  4,539
  4,811
  5,097
  5,396
  5,710
  6,040
  6,386
  6,750
  7,132
  7,533
  7,954
  8,397
  8,863
  9,352
Change in working capital, $m
  -188
  48
  49
  51
  53
  56
  58
  60
  63
  65
  68
  71
  74
  77
  81
  84
  88
  92
  96
  101
  106
  111
  116
  121
  127
  133
  140
  146
  153
  161
  169
Cash from operations, $m
  1,309
  1,499
  1,632
  1,770
  1,913
  2,063
  2,219
  2,382
  2,552
  2,730
  2,915
  3,078
  3,281
  3,493
  3,715
  3,948
  4,192
  4,447
  4,715
  4,996
  5,290
  5,600
  5,924
  6,265
  6,623
  6,999
  7,393
  7,808
  8,244
  8,702
  9,183
Maintenance CAPEX, $m
  0
  -107
  -115
  -123
  -131
  -140
  -149
  -159
  -169
  -179
  -190
  -201
  -213
  -225
  -237
  -251
  -265
  -279
  -294
  -310
  -327
  -344
  -362
  -381
  -401
  -422
  -444
  -467
  -491
  -516
  -542
New CAPEX, $m
  -239
  -101
  -101
  -105
  -109
  -113
  -118
  -123
  -128
  -133
  -139
  -145
  -151
  -157
  -164
  -172
  -180
  -188
  -196
  -206
  -215
  -225
  -236
  -247
  -259
  -271
  -284
  -298
  -312
  -328
  -344
Cash from investing activities, $m
  -304
  -208
  -216
  -228
  -240
  -253
  -267
  -282
  -297
  -312
  -329
  -346
  -364
  -382
  -401
  -423
  -445
  -467
  -490
  -516
  -542
  -569
  -598
  -628
  -660
  -693
  -728
  -765
  -803
  -844
  -886
Free cash flow, $m
  1,005
  1,291
  1,416
  1,542
  1,673
  1,810
  1,952
  2,101
  2,256
  2,417
  2,587
  2,733
  2,918
  3,111
  3,314
  3,525
  3,748
  3,980
  4,224
  4,480
  4,749
  5,031
  5,326
  5,637
  5,963
  6,305
  6,665
  7,043
  7,441
  7,858
  8,297
Issuance/(repayment) of debt, $m
  -2
  302
  314
  326
  339
  352
  367
  382
  397
  414
  432
  450
  470
  490
  512
  535
  559
  585
  611
  640
  670
  701
  734
  769
  806
  844
  885
  928
  973
  1,020
  1,070
Issuance/(repurchase) of shares, $m
  87
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  5
  302
  314
  326
  339
  352
  367
  382
  397
  414
  432
  450
  470
  490
  512
  535
  559
  585
  611
  640
  670
  701
  734
  769
  806
  844
  885
  928
  973
  1,020
  1,070
Total cash flow (excl. dividends), $m
  996
  1,593
  1,730
  1,868
  2,012
  2,162
  2,319
  2,482
  2,653
  2,831
  3,018
  3,183
  3,387
  3,601
  3,825
  4,060
  4,307
  4,565
  4,836
  5,120
  5,418
  5,732
  6,060
  6,406
  6,769
  7,150
  7,550
  7,971
  8,413
  8,878
  9,366
Retained Cash Flow (-), $m
  -1,010
  -127
  -131
  -136
  -142
  -147
  -153
  -160
  -166
  -173
  -181
  -188
  -197
  -205
  -214
  -224
  -234
  -245
  -256
  -268
  -280
  -293
  -307
  -322
  -337
  -353
  -370
  -388
  -407
  -427
  -448
Prev. year cash balance distribution, $m
 
  149
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,615
  1,598
  1,731
  1,870
  2,014
  2,165
  2,322
  2,487
  2,658
  2,838
  2,995
  3,191
  3,396
  3,611
  3,837
  4,073
  4,320
  4,580
  4,852
  5,138
  5,438
  5,753
  6,084
  6,431
  6,796
  7,180
  7,583
  8,006
  8,451
  8,919
Discount rate, %
 
  4.30
  4.52
  4.74
  4.98
  5.23
  5.49
  5.76
  6.05
  6.35
  6.67
  7.00
  7.35
  7.72
  8.11
  8.51
  8.94
  9.39
  9.86
  10.35
  10.87
  11.41
  11.98
  12.58
  13.21
  13.87
  14.56
  15.29
  16.05
  16.86
  17.70
PV of cash for distribution, $m
 
  1,548
  1,463
  1,507
  1,540
  1,561
  1,571
  1,569
  1,554
  1,527
  1,488
  1,422
  1,362
  1,291
  1,212
  1,126
  1,035
  940
  843
  747
  653
  562
  477
  399
  328
  264
  209
  163
  124
  92
  67
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

The Sherwin-Williams Company develops, manufactures, distributes, and sells paints, coatings, and related products to professional, industrial, commercial, and retail customers primarily in North and South America, the Caribbean, Europe, and Asia. The company operates in four segments: Paint Stores Group, Consumer Group, Global Finishes Group, and Latin America Coatings Group. It offers architectural paint and coatings, protective and marine products, automotive finishes and refinish products, original equipment manufacturer product finishes, and related items under the Sherwin-Williams brand. The company also licenses technology and trade names. As of December 31, 2016, its Paint Stores Group segment operated 4,180 company-operated specialty paint stores; Global Finishes Group segment operated 288 company-operated branches; and Latin America Coatings Group segment operated 339 company-operated stores. The company also sells its products through direct sales staff and outside sales representatives to retailers, dealers, jobbers, licensees and other third party distributors. The Sherwin-Williams Company was founded in 1866 and is headquartered in Cleveland, Ohio.

FINANCIAL RATIOS  of  Sherwin-Williams (SHW)

Valuation Ratios
P/E Ratio 27.4
Price to Sales 2.6
Price to Book 16.5
Price to Tangible Book
Price to Cash Flow 23.7
Price to Free Cash Flow 29
Growth Rates
Sales Growth Rate 4.6%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 2.1%
Cap. Spend. - 3 Yr. Gr. Rate 7.4%
Financial Strength
Quick Ratio 1
Current Ratio 0.2
LT Debt to Equity 64.5%
Total Debt to Equity 104%
Interest Coverage 11
Management Effectiveness
Return On Assets 19.8%
Ret/ On Assets - 3 Yr. Avg. 18%
Return On Total Capital 34.1%
Ret/ On T. Cap. - 3 Yr. Avg. 33%
Return On Equity 82.5%
Return On Equity - 3 Yr. Avg. 86%
Asset Turnover 1.9
Profitability Ratios
Gross Margin 49.9%
Gross Margin - 3 Yr. Avg. 48.5%
EBITDA Margin 16.4%
EBITDA Margin - 3 Yr. Avg. 15.3%
Operating Margin 14.7%
Oper. Margin - 3 Yr. Avg. 13.5%
Pre-Tax Margin 13.5%
Pre-Tax Margin - 3 Yr. Avg. 12.8%
Net Profit Margin 9.6%
Net Profit Margin - 3 Yr. Avg. 8.9%
Effective Tax Rate 29%
Eff/ Tax Rate - 3 Yr. Avg. 30.7%
Payout Ratio 27.5%

SHW stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the SHW stock intrinsic value calculation we used $11856 million for the last fiscal year's total revenue generated by Sherwin-Williams. The default revenue input number comes from 2016 income statement of Sherwin-Williams. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our SHW stock valuation model: a) initial revenue growth rate of 7.3% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 4.3%, whose default value for SHW is calculated based on our internal credit rating of Sherwin-Williams, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Sherwin-Williams.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of SHW stock the variable cost ratio is equal to 75.8%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $1155 million in the base year in the intrinsic value calculation for SHW stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 7.9% for Sherwin-Williams.

Corporate tax rate of 27% is the nominal tax rate for Sherwin-Williams. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the SHW stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for SHW are equal to 11.2%.

Life of production assets of 12.4 years is the average useful life of capital assets used in Sherwin-Williams operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for SHW is equal to 5.5%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1878 million for Sherwin-Williams - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 92.815 million for Sherwin-Williams is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Sherwin-Williams at the current share price and the inputted number of shares is $30.9 billion.

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COMPANY NEWS

▶ Is Sherwin-Williams Painted Into a Corner?   [Aug-01-17 12:44PM  TheStreet.com]
▶ Cramer: Roof Is Collapsing on Home Depot   [Jul-24-17 07:01PM  TheStreet.com]
▶ 5 Lousy Dividend Aristocrats To Sell Now   [Jul-23-17 09:05AM  Forbes]
▶ The Best Stock in Ohio: Sherwin-Williams   [Jul-21-17 11:50PM  Kiplinger]
▶ Sherwin-Williams misses 2Q profit forecasts   [12:24AM  Associated Press]
▶ Handling Amazon-fueled market rotations   [06:17PM  CNBC Videos]
▶ What Happened in the Stock Market Today   [04:58PM  Motley Fool]
▶ [$$] Sherwin-Williams Cuts Guidance on Acquistion Costs   [11:23AM  The Wall Street Journal]
▶ Retired Sherwin-Williams exec, chairman of Rock & Roll Hall of Fame joins IP board   [Jul-17-17 02:25PM  American City Business Journals]
▶ Analysts Recommendations for Sherwin-Williams   [09:35AM  Market Realist]
▶ Sherwin-Williams Resumed Its Upward Trend   [08:04AM  Market Realist]
▶ The 3 Best Dividend Stocks of Tomorrow   [Jul-12-17 09:30AM  Motley Fool]
▶ Top Stock Picks for the Week of June 19th   [Jun-19-17 03:59PM  Zacks]
▶ Another employer to lay off Charlotte-area workers this summer   [Jun-14-17 03:05PM  American City Business Journals]
▶ Asian stocks mixed after Wall Street gains   [Jun-13-17 11:35PM  Associated Press]
▶ Better Buy: Home Depot Inc vs. Sherwin Williams Co   [Jun-07-17 12:09PM  Motley Fool]
Stock chart of SHW Financial statements of SHW
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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