The Sherwin-Williams Company (SHW)

Q2 2026 Earnings Preview

Earnings Date: July 28, 2026 | Prepared: July 27, 2026 | Reporting Period: Q2 2026 (quarter ended June 30, 2026)

2. KPIs & Consensus Expectations

Key Takeaway: Consensus is a modestly low bar on revenue and EPS following post-Q1 downward drift, but PSG same-store sales growth (~2.7% consensus) is the higher-stakes swing factor — a miss there would likely overshadow any EPS beat.

Table 1 — Current Quarter Snapshot (Q2 2026)

Sources: Visible Alpha Consensus and Actuals Data (Total Revenue, Adj. EPS, PSG SSS, PSG Margin, Adj. EBITDA); SHW Q1 2026 Earnings Release (guidance language).

Table 2 — Beat/Miss History (Last 8 Quarters)

Top KPI 1: Adjusted Diluted EPS

Top KPI 2: PSG Same-Store Sales Growth (%)

Pattern: SHW has beaten on adjusted EPS in 5 of the last 7 reported quarters, but PSG same-store sales have missed consensus in 5 of the last 7 quarters — the Street consistently overestimates volume recovery, making SSS the higher-risk line item heading into Q2. Source: Visible Alpha Consensus and Actuals Data.

3. Guidance & Commentary Evolution

Key Takeaway: Guidance is unchanged since Q1 earnings — full-year adjusted EPS of $11.50–$11.90 was reaffirmed — but the composition has shifted materially: more price, less volume, and higher raw material inflation. Management tone is cautious but confident in execution.

Source: SHW Q1 2026 Earnings Release and Earnings Call Transcript (April 28, 2026); Visible Alpha Consensus Data.

4. Guidance vs. Estimate Revision Tracker

Key Takeaway: Estimates have drifted modestly lower since Q1 earnings for both Q2 and FY 2026, but the magnitude is small — the Street is essentially tracking guidance rather than diverging from it. The gap between consensus and guidance midpoints is narrow, suggesting limited cushion but also limited downside risk from estimate cuts alone.

Estimates have been remarkably stable since Q1 earnings, with Q2 revenue and EPS essentially flat to slightly up versus the post-print baseline. The modest downward drift in PSG SSS consensus (-34 bps) reflects the Street's continued skepticism about volume recovery, consistent with the historical pattern of SSS misses. FY 2026 EPS consensus sits just above the guidance midpoint, implying the Street believes SHW can execute on its pricing-led strategy but is not pricing in meaningful upside.

Source: Visible Alpha Consensus and Actuals Data (as-of dates: May 5, 2026 and July 27, 2026); SHW Q1 2026 Earnings Call Transcript.

5. Stock Performance

Key Takeaway: SHW has underperformed both XLB and the S&P 500 since Q1 earnings, driven almost entirely by multiple compression rather than estimate cuts — the EV/EBITDA multiple has contracted ~6.5% over 3 months, suggesting the market is discounting the durability of the pricing-led margin story in a soft-volume environment.

SHW vs. XLB (Materials ETF) vs. S&P 500 — Indexed to 100 at Q1 2026 Earnings (April 28, 2026). Source: Yahoo Finance / Stock Price Data.

Since Q1 2026 earnings on April 28, SHW has declined approximately 1% (from $324.27 to ~$327 as of July 28), while the S&P 500 has gained roughly 3.9% and XLB (Materials ETF) has been essentially flat. The underperformance is attributable almost entirely to multiple compression: the NTM EV/EBITDA multiple has contracted from ~19.5x to ~18.3x over the past 3 months (-6.5%), and the NTM P/E has compressed from ~27.8x to ~25.2x (-9.6%). This is not an estimate-driven selloff — consensus EPS has been essentially flat — but rather a re-rating of the premium the market is willing to pay for SHW's growth story in a prolonged soft-demand environment. The stock found a trough in early June (~$293) before recovering sharply through late June and early July (reaching $352 on July 2), then pulling back again into earnings. The late-June rally appears to have been driven by improving sentiment around the housing market and a broader materials sector rotation, not company-specific catalysts. At current levels, SHW trades at ~25x NTM P/E versus a peer average in the low-to-mid 20s, still commanding a premium but at the lower end of its recent historical range.

Source: Yahoo Finance / Stock Price Data; Visible Alpha (NTM multiples).

6. Material News & Developments

Key Takeaway: The most material development since Q1 earnings is the escalation of Middle East conflict-driven petrochemical inflation, which has forced SHW to implement surgical mid-season price increases — the key question for Q2 is whether those increases are sticking without sacrificing volume.

• April 28, 2026 — Q1 2026 Earnings Beat & Guidance Reaffirmed: SHW reported Q1 adjusted EPS of $2.35 (vs. $2.25 consensus, +4.4% beat) and revenue of $5.67B (+6.8% YoY). Full-year adjusted EPS guidance of $11.50–$11.90 was reaffirmed. Critically, management raised raw material inflation outlook to low-to-mid single digits (from low single digits) and revised volume expectations downward while offsetting with higher price realization. Stock rose mid-single digits on the day. Implication: Sets a beatable bar for Q2 but raises the stakes on whether pricing is holding.
• April 28, 2026 — Raw Material Inflation Outlook Raised: Management explicitly flagged that Middle East conflict has disrupted petrochemical supply chains, particularly propylene-derived inputs and solvents. Inflation now expected to be heavier in H2 2026, with the exit rate at the high end of the low-to-mid single-digit range. Implication: Q2 raw material headwinds are likely more acute than Q1; gross margin expansion may be harder to sustain.
• April 28, 2026 — Surgical Pricing Strategy Announced: Management described implementing "incremental targeted actions by customer, geography and end markets" — described as "very surgical" to avoid putting volume at risk. Pricing embedded in the updated guide is more than double what was in the original January guidance. Implication: Q2 price/mix realization is the key variable; any evidence of volume sacrifice would be a negative signal.
• July 22, 2026 — Lead Paint Controversy (Cleveland.com Series): Cleveland.com published a series linking SHW to the lead poisoning crisis. SHW pushed back, stating it submitted a five-page response before publication that was not included. Company spokesperson noted SHW "often was ahead of" federal, state and local regulations and plans to publish a rebuttal. SHW has made $2.375M+ in local charitable contributions related to lead abatement (2021–2025). Implication: Reputational/legal risk; unlikely to affect Q2 financials but could weigh on sentiment. Monitor for litigation developments.
• July 22, 2026 — RPM International Q4 FY2026 Earnings (Peer Read-Through): RPM reported record Q4 results with 2.5% organic growth and guided FY2027 sales +3–7% and EBITDA +5–10%. RPM flagged raw material inflation of 5–6% in Q1 FY2027 (June–August 2026) and potentially 6–8% in Q2 FY2027. Implication: Confirms the inflationary environment SHW is navigating; RPM's ability to expand margins despite inflation is a positive read-through for SHW's pricing power.
• July 23, 2026 — Dow Inc. Q2 2026 Earnings (Peer Read-Through): Dow reported Q2 EPS of $1.44 (vs. $1.31 consensus), with Performance Materials & Coatings net sales up 11% YoY, driven by higher price and volume in architectural coatings. Polyethylene prices up 30%+ YoY in Packaging & Specialty Plastics. Implication: Confirms strong architectural coatings demand in Q2 and validates SHW's pricing environment, but also confirms elevated raw material costs.
• July 23, 2026 — Axalta / AkzoNobel Merger Amendment: Axalta and AkzoNobel amended their merger agreement to revise governance structure. Implication: Competitive landscape consolidation; could create share gain opportunities for SHW if integration disrupts customer relationships.
• Ongoing — U.S. Housing Market Remains Soft: Dow's Q2 commentary explicitly noted "the U.S. housing market is still soft under the weight of affordability concerns and high mortgage rates." Fed expected to hold rates at July 29 meeting; September hike anticipated. Implication: Residential repaint and new residential end markets remain headwinds for SHW's PSG segment.
• Ongoing — Iran War / Energy Price Surge: National average gasoline reached $4.06/gallon (week of July 22); diesel at $5.13/gallon (biggest weekly climb since March). Oil up ~$10 in the week of July 21. Implication: Adds to raw material and logistics cost pressure for SHW in Q2 and H2 2026.
• Upcoming — SHW Financial Community Presentation (September 24, 2026): Management announced an investor day in Cleveland on September 24, 2026, where attendees will see the new global headquarters and global technology center. Implication: Potential catalyst for re-rating if management provides constructive long-term targets.

7. Peer Commentaries / Read-Throughs (Last 60 Days)

Key Takeaway: Peer commentary from Dow (Q2 2026 results) and RPM International (Q4 FY2026 results, covering March–May 2026) provides the most relevant same-quarter read-throughs for SHW's Q2 2026. Both confirm: (1) architectural coatings demand was positive in Q2, (2) raw material inflation is real and accelerating, and (3) pricing power is holding but volume is mixed. RPM's forward commentary about DIY stabilization is a cautious positive for SHW's Consumer Brands Group.

Methodology Note: Only commentary based on conditions during SHW's Q2 2026 (April–June 2026) or an overlapping period is included as a direct read-through. Forward-looking guidance from peers about their own future quarters is labeled as context only and not treated as a Q2 2026 read-through.

Dow Inc. (DOW) — Q2 2026 Earnings (Reported July 23, 2026)

Coverage Period: April–June 2026 (exact same quarter as SHW Q2 2026). Relevance: High — Dow is a major supplier of petrochemical raw materials and a participant in the architectural coatings value chain.

• ✅ DIRECT Q2 READ-THROUGH — Architectural Coatings Demand Positive: Dow's Performance Materials & Coatings segment reported net sales up 11% YoY in Q2 2026. The Coatings & Performance Monomers business "reported an increase in net sales across all regions compared to the year-ago period, led by higher price and volume in both acrylic monomers and architectural coatings." Volume in the segment grew 6% YoY. SHW Read-Through: Positive signal for SHW's PSG and PCG architectural coatings demand in Q2 2026. Suggests the demand environment was supportive, not deteriorating.
• ✅ DIRECT Q2 READ-THROUGH — U.S. Housing Remains Soft: Dow's CEO explicitly noted: "Economic activity is constructive, and spending has held up, even as the U.S. housing market is still soft under the weight of affordability concerns and high mortgage rates." SHW Read-Through: Consistent with SHW's own Q1 commentary; new residential end market likely remained a headwind in Q2. Residential repaint and commercial are the offsetting drivers.
• ✅ DIRECT Q2 READ-THROUGH — Petrochemical Raw Material Inflation Confirmed: Dow's Packaging & Specialty Plastics segment saw local price up 30% YoY, driven by higher polyethylene prices in all regions. Geopolitical events (Middle East conflict) continued to support higher risk premiums on energy and feedstocks. SHW Read-Through: Confirms SHW faced elevated raw material costs in Q2 2026, particularly for propylene-derived inputs and solvents. Validates SHW's decision to implement surgical price increases.
• ✅ DIRECT Q2 READ-THROUGH — Pricing Power Holding, Volume Mixed: Dow's Performance Materials & Coatings segment achieved both price (+4% YoY) and volume (+6% YoY) growth in Q2. CEO noted Dow was "maximizing margins" and chose not to sell into some volume to restore margins. SHW Read-Through: Positive for SHW's ability to hold price in architectural coatings. The volume/price trade-off dynamic is consistent with SHW's surgical pricing approach.
• ✅ DIRECT Q2 READ-THROUGH — Industrial Demand Mixed: Dow's Industrial Intermediates & Infrastructure segment saw local price up 15% YoY but noted "volume growth across industrial market applications was more than offset by impacts from the Middle East conflict." SHW Read-Through: Mixed signal for SHW's Performance Coatings Group (PCG) industrial end markets. Some underlying growth but geopolitical headwinds dampening volume.
• ⚠️ CONTEXT ONLY (Forward-Looking, Not Q2 Read-Through) — Q3 2026 Outlook: Dow guided Q3 2026 EBITDA of ~$1.7B (below Q2), citing "typical seasonal slowdown in coatings demand" and "normal seasonal declines in building and construction." CEO noted building and construction fundamentals are "still pretty weak overall." Note: This is Dow's forward guidance for Q3 2026, not a read-through for SHW's Q2 2026 results.

RPM International (RPM) — Q4 FY2026 Earnings (Reported July 22, 2026)

Coverage Period: March 1 – May 31, 2026 (RPM's fiscal Q4). Overlap with SHW Q2 2026: April and May 2026 (2 of 3 months). Relevance: High — RPM is a direct coatings peer with significant exposure to professional, industrial, and consumer paint markets.

• ✅ DIRECT Q2 READ-THROUGH (Apr–May) — Record Results Despite Challenging Environment: RPM reported record Q4 FY2026 results with 2.5% organic growth, 3.5% from acquisitions, and 1.2% FX benefit. CEO Frank Sullivan noted "record results for the quarter and full year during a volatile economic period." Construction Products Group (CPG) and Performance Coatings Group (PCG) led growth with low-to-mid single-digit unit volume growth. SHW Read-Through: Positive — confirms professional/industrial coatings demand was solid in April–May 2026.
• ✅ DIRECT Q2 READ-THROUGH (Apr–May) — DIY Markets Remained Soft: RPM's Consumer Group "continued to face challenging DIY markets" with a 0.8% organic decline. End markets "remained soft." SHW Read-Through: Consistent with SHW's Q1 commentary about soft DIY demand in North America. SHW's Consumer Brands Group (CBG) North America likely remained under pressure in Q2.
• ✅ DIRECT Q2 READ-THROUGH (Apr–May) — Pricing Holding, Price/Cost Slightly Favorable: RPM noted price was "up about 2%" in Q4 FY2026 and price/cost mix was "slightly favorable in the quarter." Pricing increases to offset inflation contributed to sales growth across segments. SHW Read-Through: Positive signal that pricing is sticking in the coatings industry without significant volume sacrifice.
• ✅ DIRECT Q2 READ-THROUGH (Apr–May) — Raw Material Inflation Elevated but Spot Prices Off Peak: RPM noted spot prices "have declined from their peak" but are "still elevated from the beginning of the calendar year." A fire at a supplier's plant caused tightness in propylene oxide-derived raw materials in North America. MDI supplies also tight. SHW Read-Through: Confirms SHW's raw material environment in April–May was inflationary but not at peak levels. The propylene oxide supply tightness is directly relevant to SHW's cost basket.
• ✅ DIRECT Q2 READ-THROUGH (Apr–May) — North American Commercial Construction Weak: RPM noted "underlying commercial construction continues to be weak and we don't see that changing." North American growth was driven by turnkey and system solutions for high-performance buildings (data centers, infrastructure). SHW Read-Through: Consistent with SHW's Q1 commentary about choppy commercial market. SHW's commercial segment was up mid-single digits in Q1 despite soft completions; similar dynamic likely in Q2.
• ✅ DIRECT Q2 READ-THROUGH (Apr–May) — Margin Expansion Achievable Despite Inflation: RPM expanded consolidated adjusted EBIT margins to a "fourth quarter record" despite inflation, driven by volume growth, operational efficiency, and fixed-cost leverage. SHW Read-Through: Positive signal that margin expansion is achievable in the current environment if volume holds and pricing sticks — consistent with SHW's 14-of-15-quarter gross margin expansion track record.
• ⚠️ CONTEXT ONLY (Forward-Looking, Not Q2 Read-Through) — RPM FY2027 Q1 Guidance (June–August 2026): RPM guided Q1 FY2027 (June–August 2026) sales up mid-single digits and EBITDA up mid-single digits. Raw material inflation expected at 5–6% in Q1 FY2027 and potentially 6–8% in Q2 FY2027. DIY markets "showing signs of stabilization." Note: This is RPM's forward guidance for periods beginning June 2026 — the June portion overlaps with SHW's Q2 2026 but the guidance was issued prospectively, not as a report of June conditions. Treat as directional context for SHW's Q3 2026 outlook, not a Q2 read-through.

Peer Read-Through Summary Table

Sources: DOW Q2 2026 Earnings Release and Earnings Call Transcript (July 23, 2026); RPM International Q4 FY2026 Earnings Release and Earnings Call Transcript (July 22, 2026).

8. Insider Transaction Activity

Key Takeaway: No open-market insider purchases or discretionary sales were identified in the SEC Form 4 database for SHW in the 60 days prior to Q2 2026 earnings. The absence of insider buying ahead of earnings is neutral — not a negative signal given the typical quiet period restrictions, but also not a positive catalyst.

Source: SEC EDGAR Form 4 filings database (search conducted for SHW, May 27 – July 27, 2026).

9. Key Risks

• Raw Material Inflation Exceeds Guidance: Management guided low-to-mid single-digit basket inflation for FY 2026, with H2 weighted more heavily. If Middle East conflict escalation drives propylene and petrochemical costs above the high end of guidance, gross margin expansion could stall or reverse. RPM flagged 5–6% raw material inflation for its Q1 FY2027 (June–August 2026), suggesting the environment may be more acute than SHW's guidance implies.
• Volume Sacrifice from Surgical Pricing: SHW's strategy of implementing targeted price increases by customer, geography, and end market carries the risk of volume loss if customers push back or switch to lower-cost alternatives. PSG SSS has missed consensus in 5 of the last 7 quarters; a Q2 miss would likely be the most negative catalyst for the stock.
• Prolonged Housing Market Weakness: Management explicitly guided for "little to no recovery in most end markets" in 2026. If mortgage rates remain elevated and existing home sales stay depressed, the residential repaint and new residential end markets — which together represent a significant portion of PSG revenue — will remain headwinds. The Fed is expected to hold rates at the July 29 meeting.
• Multiple Compression Risk: SHW trades at ~25x NTM P/E, a premium to peers. If the Q2 print fails to demonstrate that the pricing-led strategy is working (i.e., if volume declines are larger than expected or gross margin disappoints), the multiple could compress further. The stock has already de-rated ~10% on EV/EBITDA over the past 12 months.
• Lead Paint Litigation / Reputational Risk: The Cleveland.com series linking SHW to the lead poisoning crisis could attract regulatory scrutiny or litigation. While SHW has been proactive in charitable contributions and plans to publish a rebuttal, the reputational overhang could weigh on sentiment.
• Geopolitical / Supply Chain Disruption: The Middle East conflict has disrupted petrochemical supply chains and driven energy price spikes. Further escalation could worsen raw material availability and cost, particularly for propylene-derived inputs and solvents. SHW notes ~80% of consolidated revenue is in North America with regionally sourced raw materials, providing some insulation, but the remaining 20% (PCG international) is more exposed.
• Suvinil Integration Dilution: The October 2025 Suvinil acquisition added a low-single-digit revenue contribution in Q1 but was dilutive to gross margin. If integration costs or margin dilution persist into Q2, it could weigh on consolidated profitability metrics.