Sherwin-Williams (SHW) is a high-quality market leader in the global paints and coatings industry. However, we believe its current valuation and exposure to the challenged housing market warrant a Hold rating. SHW’s strong competitive advantages, including its well-known brands, innovation track record, and controlled distribution, have driven solid free cash flow growth. The company has consistently returned excess cash to shareholders through dividends and share repurchases while maintaining a strong balance sheet. Its controlled distribution model, extensive salesforce, and ongoing investments in research and development differentiate it from competitors. Despite these strengths, the company’s cyclical exposure to housing starts, high input costs, and macroeconomic headwinds pose risks to its future performance. We will continue to monitor SHW’s fundamental progression and valuation closely before considering a position.