In a report released yesterday, John McNulty from BMO Capital maintained a Buy rating on PPG Industries (PPG – Research Report), with a price target of $130.00.
John McNulty’s rating is based on PPG Industries’ strategic moves and future growth potential. After divesting certain businesses, PPG is set to focus on driving growth and maintaining capital discipline, which is expected to enhance their top line and operational leverage in 2025. The company’s commitment to using its balance sheet effectively, through buybacks or disciplined mergers and acquisitions, is anticipated to help recapture its multiple and reach a target price of $130.
Furthermore, the new reporting structure following the resegmentation and asset sales provides greater transparency, which should benefit the company in terms of disclosures across different segments. Notably, PPG is positioned to see industrial margins improve due to its high operating leverage and share gains in auto OEMs. The management’s confidence in the current portfolio, which they believe can deliver significant EPS growth over the long term, supports the Buy rating. Additionally, as PPG gains traction in high-growth areas such as electric vehicles, sustainable can packaging, and aerospace, these trends are expected to accelerate the company’s growth and lead to margin improvements.
McNulty covers the Basic Materials sector, focusing on stocks such as Ashland, Air Products and Chemicals, and Celanese. According to TipRanks, McNulty has an average return of 2.6% and a 53.27% success rate on recommended stocks.
In another report released yesterday, Robert W. Baird also maintained a Buy rating on the stock with a $135.00 price target.