Sherwin-Williams is poised to give up ground as the Iran war pushes up raw material costs, according to Wells Fargo. The bank downgraded the paint company to equal-weight from overweight. It also lowered its price target on shares to $365 from $410, implying 8.7% upside from Thursday’s close. “The war in Iran has led to broad-based inflation across most commodity chains, flowing down to coatings raw materials,” Michael Sison said Thursday in a note to clients. “We believe margins will be pressured by rising raw material costs as the conflict in the Middle East persists.” SHW YTD mountain Shares are up nearly 4% in 2026. Raw material costs are rising due, in part, to reduced production and disrupted shipping of some chemicals across the Middle East, according to Wells Fargo. That is pushing up raw material costs. Sherwin-Williams’ revenue is also likely to take a hit as consumers tighten their purse strings due to ongoing concerns about the U.S. economy and rising gasoline prices. “We expect to see from higher costs, we believe top line results for coatings names will be pressured by a tougher macro backdrop as affordability remains challenging,” Sison wrote. “This will likely pressure growth/improvement across the housing market (we expect another trough year for the US market), auto sales, and potentially industrial production.” The analyst added that macroeconomic headwinds posed by the Iran war could persist for three to four months or longer, even if the tenuous ceasefire between Iran and the U.S. remains intact. Wells Fargo’s call goes against consensus on Wall Street. Of the 27 analysts covering Sherwin-Williams, 16 have buy or strong buy on the stock, according to LSEG. Shares have risen nearly 4% since the beginning of this year, outperforming the overall market. Wells Fargo also cut its rating on Axalta Coating Systems to equal weight from overweight, also citing the higher raw material costs for the downgrade.
