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PPG Industries (PPG)
NYSE:PPG
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PPG Industries
(NYSE:PPG)
65Neutral
Positive Factors
Cost Savings
PPG expects to see $60MM in pretax savings during 2025, thanks to self-help initiatives including European manufacturing consolidations.
Foreign Exchange
Favorable movements in FX are reflected since 4Q reporting, showing improvement in the foreign exchange headwinds.
Industrial Volume Forecast
An upward revision to Industrial segment volumes is primarily driven by an increase in industry-wide auto production forecasts and modest improvements in global industrial production.
Negative Factors
Architectural Segment
There is a downward revision to Architectural segment volumes due to issues related to Comex and ongoing uncertainty surrounding US/Mexico trade relations.
Market Share
PPG's growth in the OEM sector appears to be below market, while competitors like Axalta have been gaining share.
Organic Volume Growth
PPG's organic volume growth has been negative for five of the previous six years.
PPG Industries (PPG) vs. S&P 500 (SPY)
Market Cap
$22.50B
Dividend Yield2.71%
Average Volume (3M)2.43M
Price to Earnings (P/E)16.6
Beta (1Y)0.91
Revenue Growth-4.59%
EPS Growth11.09%
CountryUS
Employees46,000
SectorBasic Materials
Sector Strength59
IndustryChemicals - Specialty
Share Statistics
EPS (TTM)5.95
Shares Outstanding226,974,900
10 Day Avg. Volume2,876,433
30 Day Avg. Volume2,427,754
Financial Highlights & Ratios
PEG Ratio1.50
Price to Book (P/B)N/A
Price to Sales (P/S)1.59
Price to Cash Flow (P/CF)18.20
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$129.79Price Target Upside30.90% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering17
PPG Industries Business Overview & Revenue Model
Company DescriptionPPG Industries, Inc. manufactures and distributes paints, coatings, and specialty materials worldwide. The company's Performance Coatings segment offers coatings, solvents, adhesives, sealants, sundries, and software for automotive and commercial transport/fleet repair and refurbishing, light industrial coatings, and specialty coatings for signs; and coatings, sealants, transparencies, transparent armor, adhesives, engineered materials, and packaging and chemical management services for commercial, military, regional jet, and general aviation aircraft. It also provides coatings and finishes for the protection of metals and structures, such as metal fabricators, heavy duty maintenance contractors, and manufacturers of ships, bridges, and rail cars; paints, wood stains, adhesives, and purchased sundries for painting and maintenance contractors, and consumers for decoration and maintenance of residential and commercial building structures; and paints, thermoplastics, pavement marking products, and other technologies for pavement marking. The company's Industrial Coatings segment offers coatings, adhesives and sealants, and metal pretreatments, as well as services and coatings applications for appliances, agricultural and construction equipment, consumer electronics, automotive parts and accessories, building products, kitchenware, and transportation vehicles and other finished products; and on-site coatings services. It also provides coatings for metal cans, closures, plastic tubes, and promotional and specialty packaging; amorphous precipitated silica for tire, battery separator, and other end-uses; TESLIN substrates for labels, e-passports, drivers' licenses, breathable membranes, and loyalty and identification cards; and organic light emitting diode materials, displays and lighting lens materials, optical lenses, color-change products, and photochromic dyes. The company was incorporated in 1883 and is headquartered in Pittsburgh, Pennsylvania.
How the Company Makes MoneyPPG Industries generates revenue primarily through the sale of its paints, coatings, and specialty materials. The company operates through two main segments: Performance Coatings and Industrial Coatings. The Performance Coatings segment includes products for automotive refinish, aerospace, protective and marine coatings, and architectural coatings. The Industrial Coatings segment provides coatings for automotive original equipment manufacturers (OEM), industrial equipment, packaging, and specialty coatings. PPG's revenue streams are bolstered by strategic partnerships with automotive manufacturers, construction companies, and industrial clients. Additionally, the company invests in research and development to innovate and enhance its product offerings, ensuring competitiveness and meeting evolving customer needs. PPG's extensive global distribution network and strong brand recognition further contribute to its earnings.
PPG Industries Financial Statement Overview
Summary
PPG Industries shows strong revenue growth and profitability margins, despite recent revenue contraction. The balance sheet reflects effective leverage management with a low equity ratio suggesting reliance on debt. Cash flow statements indicate potential volatility, suggesting a need for improved cash management strategies.Income Statement
PPG Industries shows a consistent revenue growth trend over several years, though 2024 saw a decline. Gross profit margins and EBIT margins are robust, indicating efficient cost management and operational effectiveness. However, net profit margins have seen some fluctuation, which suggests potential volatility in net earnings.75
Positive
Balance Sheet
The company's debt-to-equity ratio has improved over time, demonstrating effective leverage management. However, the equity ratio is relatively low, indicating a higher reliance on debt financing. Return on equity is stable, reflecting consistent profitability relative to equity.70
Positive
Cash Flow
Cash flow management appears volatile with significant changes in free cash flow year-over-year. The operating cash flow to net income ratio has shown variability, indicating potential inconsistencies in cash generation relative to accounting profits.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 15.85B | 18.25B | 17.65B | 16.80B | 13.83B | Gross Profit |
| 6.59B | 7.55B | 6.56B | 6.52B | 6.06B | EBIT |
| 1.38B | 2.78B | 1.72B | 1.82B | 1.79B | EBITDA |
| 2.58B | 2.60B | 2.38B | 2.57B | 2.08B | Net Income Common Stockholders |
| 1.38B | 1.27B | 1.03B | 1.44B | 1.06B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.36B | 1.59B | 1.15B | 1.07B | 1.92B | Total Assets |
| 19.43B | 21.65B | 20.74B | 21.35B | 19.56B | Total Debt |
| 6.39B | 6.87B | 7.63B | 192.00M | 180.00M | Net Debt |
| 5.13B | 5.36B | 6.54B | -813.00M | -1.65B | Total Liabilities |
| 12.47B | 13.62B | 14.04B | 14.94B | 13.74B | Stockholders Equity |
| 6.79B | 7.83B | 6.59B | 6.29B | 5.69B |
| Cash Flow | Free Cash Flow | |||
| 699.00M | 1.86B | 445.00M | 1.19B | 1.83B | Operating Cash Flow |
| 1.42B | 2.41B | 963.00M | 1.56B | 2.13B | Investing Cash Flow |
| -399.00M | -556.00M | -461.00M | -2.40B | -1.45B | Financing Cash Flow |
| -1.43B | -1.55B | -409.00M | 93.00M | -59.00M |
PPG Industries Technical Analysis
Negative
99.15
Price Trends
113.58
Negative
117.21
Negative
121.10
Negative
Market Momentum
-1.52
Positive
40.69
Neutral
34.18
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PPG, the sentiment is Negative. The current price of 99.15 is below the 20-day moving average (MA) of 110.52, below the 50-day MA of 113.58, and below the 200-day MA of 121.10, indicating a bearish trend. The MACD of -1.52 indicates Positive momentum. The RSI at 40.69 is Neutral, neither overbought nor oversold. The STOCH value of 34.18 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PPG.
PPG Industries Risk Analysis
PPG Industries disclosed 16 risk factors in its most recent earnings report. PPG Industries reported the most risks in the “Macro & Political” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
PPG Industries Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $6.49B | 16.74 | 21.49% | ― | 1.77% | 47.48% | |
77 Outperform | $13.91B | 21.37 | 25.61% | 1.79% | 0.12% | 24.30% | |
75 Outperform | $8.72B | 9.84 | 16.11% | 4.34% | 1.91% | 2.94% | |
68 Neutral | $83.52B | 31.47 | 69.05% | 0.88% | 0.20% | 14.31% | |
65 Neutral | $24.75B | 35.38 | 3.12% | 2.62% | 2.64% | 80.37% | |
65 Neutral | $22.50B | 16.62 | 19.13% | 2.71% | -4.59% | 11.09% | |
47 Neutral | $2.36B | -3.00 | -21.73% | 3.58% | 3.97% | -28.71% |
* Basic Materials Sector Average
Performance Comparison
PPG
PPG Industries
99.15
-37.74
-27.57%
EMN
Eastman Chemical
75.53
-21.67
-22.29%
RPM
RPM International
108.23
-3.06
-2.75%
SHW
Sherwin-Williams Company
332.06
2.51
0.76%
AXTA
Axalta Coating Systems
29.73
-3.23
-9.80%
DD
DuPont de Nemours
59.14
-15.72
-21.00%
PPG Industries Earnings Call Summary
Earnings Call Date: Jan 30, 2025 | % Change Since: -18.76% | Next Earnings Date: Apr 17, 2025
Earnings Call Sentiment Neutral
The earnings call presented a balanced view with significant achievements in strategic portfolio optimization, strong performance in specific segments and regions, and shareholder returns. However, challenges in macroeconomic conditions, volume declines, and raw material cost concerns were also noted.Highlights
Record Full-Year Adjusted EPS
PPG achieved a full-year adjusted EPS of $7.87, reflecting a 6% year-over-year growth, excluding $0.27 EPS reclassified to discontinued operations.
Strategic Portfolio Optimization
Completed divestitures of silica products and Architectural Coatings U.S. and Canada businesses, improving financial profile and achieving top-tier EBITDA margins.
Strong Performance in Aerospace Coatings
Aerospace Coatings recorded double-digit organic sales growth in Q4, with a backlog of approximately $300 million due to strong demand and industry dynamics.
Growth in Latin America and China
PPG reported strong growth in its businesses in Latin America and China, including architectural, automotive, and industrial coatings.
Share Repurchase and Dividend Payout
PPG returned $1.4 billion to shareholders in 2024 through dividends and share repurchases, with plans to repurchase $400 million in shares in Q1 2025.
Lowlights
Volume Decline and Macro Challenges
Organic sales declined low-single digits year-over-year, impacted by weak global industrial production and sluggish demand in architectural coatings EMEA.
Raw Material Cost Concerns
Anticipated low-single-digit percentage inflation in raw material costs due to tariffs, with pricing adjustments expected to address cost mismatches.
Weak Automotive OEM and Industrial Coatings Demand
Auto OEM production and Industrial Coatings segment were constrained by soft global industrial production, affecting sales volumes and segment EBITDA margin.
Company Guidance
During the fourth quarter and full-year 2024 earnings call, PPG Industries provided guidance reflecting positive future prospects despite a challenging macroeconomic environment. The company reported a 6% year-over-year growth in adjusted EPS, excluding certain reclassified EPS due to divestitures, achieving $7.87 for the year. PPG highlighted its strategic portfolio optimization, including completing divestitures in the silica products and Architectural Coatings U.S. and Canada businesses, which contributed to higher operating margins and a more focused organization. For 2025, PPG anticipates delivering an adjusted EPS range of $7.75 to $8.05, representing a 7% growth at the midpoint, excluding currency impacts and higher tax rates. The company projects low-single-digit organic sales growth with stronger results in the second half of the year, supported by $100 million in annual share gains within the Industrial Coatings segment. PPG emphasized its commitment to shareholder value creation through strategic cost reductions, operational excellence, and disciplined cash deployment, including a $400 million share repurchase in the first quarter of 2025.PPG Industries Corporate Events
Executive/Board Changes
PPG Industries Announces Senior VP Retirement Plan
Neutral
Oct 24, 2024
Ramaprasad Vadlamannati is retiring as Senior Vice President of Operations at PPG Industries, with his active role ending by December 2024. He will then be on unpaid leave for 2025, receiving a $102,000 separation payment and eligible for a 2024 performance bonus. His stock options will vest as planned, and PPG will continue offering financial and tax assistance.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.