PPG Industries (PPG) AI Stock Analysis

• Market Cap: $25.56B
• Dividend Yield: 2.42%
• Average Volume (3M): 1.75M
• Price to Earnings (P/E): 19.1
• Beta (1Y): 0.88
• Revenue Growth: -7.67%
• EPS Growth: -0.58%
• Country: US
• Employees: 46,000
• Sector: Basic Materials
• Sector Strength: 62
• Industry: Chemicals - Specialty
• EPS (TTM): 1.72
• Shares Outstanding: 227,000,000
• 10 Day Avg. Volume: 1,414,262
• 30 Day Avg. Volume: 1,752,172
• PEG Ratio: -18.70
• Price to Book (P/B): 3.71
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 32.44
• Enterprise Value/Market Cap: 1.24
• Enterprise Value/Revenue: 0.47
• Enterprise Value/Gross Profit: 5.17
• Enterprise Value/Ebitda: 2.93
• 1Y Price Target: $124.60
• Price Target Upside: 10.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 17

• Rating: 64 Neutral
• Price Target: $119.00 ▲(5.68%Upside)

PPG Industries' overall stock score is driven by solid financial performance with strong cash flow but hindered by high leverage and revenue growth challenges. Technical analysis shows stability, and the valuation is fair. The earnings call provided a mixed picture with positive regional growth but challenges in overall sales and geopolitical risks.

Positive Factors

Business Strategy

The exiting of the US Architectural business is seen as a positive move that will help improve margins and growth, leading to multiple expansion.

Earnings Guidance

Potential exists for valuation multiple upside if FY earnings come in as guided.

Investor Interest

PPG recently picked up interest from value investors who saw the significant multiple contraction as overdone, aided by improved FX.

Negative Factors

Market Share

PPG's growth in the OEM sector appears to be below market, while competitors like Axalta have been gaining share.

Sector Performance

Declines in Architectural and Industrial sectors were due to a construction slowdown in Mexico, weaker EMEA architectural demand, and softer auto OEM builds.

Stock Performance

PPG has been a weak equity performer, lower by 18% over the past year versus gains for the S&P Index and other competitors.

PPG Industries Business Overview & Revenue Model

Company Description

PPG 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 Money

PPG Industries generates revenue primarily through the sale of its diverse portfolio of coatings and paints. The company operates through two main segments: Performance Coatings and Industrial Coatings. The Performance Coatings segment focuses on products for automotive refinish, aerospace, architectural, and protective and marine coatings, serving both professional and consumer markets. The Industrial Coatings segment provides products for automotive original equipment manufacturers (OEM), industrial equipment, packaging, and specialty coatings. PPG's revenue streams are bolstered by its strong global presence, extensive distribution network, and strategic partnerships with various industries. The company also invests in research and development to innovate new products and enhance existing formulations, ensuring a competitive edge in the market.

PPG Industries Financial Statement Overview

Summary

PPG Industries shows solid profitability with a strong EBIT margin and healthy cash flow generation. However, the company faces challenges with revenue growth, high leverage, and a negative equity position, indicating significant financial risks.

Income Statement

The income statement shows moderate profitability with a Gross Profit Margin of 54.25% and a Net Profit Margin of 7.20% for TTM. Revenue growth has been inconsistent, with a decline to $15.218 billion from $15.845 billion in the previous period. Despite a strong EBIT margin of 13.76%, the decline in revenue and net income suggests pressures on top-line growth.

Balance Sheet

The balance sheet indicates high leverage with a negative Stockholders' Equity of -$3.51 billion, resulting in an undefined Debt-to-Equity ratio. The equity ratio is also negative due to the deficit in equity, highlighting significant financial risks and instability.

Cash Flow

Cash flow analysis reveals strong free cash flow generation with a Free Cash Flow of $1.224 billion for TTM. The Operating Cash Flow to Net Income ratio is healthy at 1.35, indicating efficient cash generation relative to net income. Free Cash Flow to Net Income is also robust, reflecting strong cash flow performance despite some fluctuations in revenue.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
15.22B	15.85B	18.25B	17.65B	16.80B	13.83B
	Gross Profit
6.11B	6.59B	7.55B	6.56B	6.52B	6.06B
	EBIT
2.22B	2.29B	2.78B	1.72B	1.82B	1.79B
	EBITDA
2.53B	2.58B	2.60B	2.38B	2.57B	2.08B
	Net Income Common Stockholders
1.09B	1.12B	1.27B	1.03B	1.44B	1.06B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.59B	1.36B	1.59B	1.15B	1.07B	1.92B
	Total Assets
21.65B	19.43B	21.65B	20.74B	21.35B	19.56B
	Total Debt
6.87B	6.39B	6.87B	7.63B	192.00M	180.00M
	Net Debt
5.36B	5.13B	5.36B	6.54B	-813.00M	-1.65B
	Total Liabilities
13.62B	12.47B	13.62B	14.04B	14.94B	13.74B
	Stockholders Equity
7.83B	6.79B	7.83B	6.59B	6.29B	5.69B
Cash Flow		Free Cash Flow
788.00M	699.00M	1.86B	445.00M	1.19B	1.83B
	Operating Cash Flow
1.46B	1.42B	2.41B	963.00M	1.56B	2.13B
	Investing Cash Flow
178.00M	107.00M	-556.00M	-461.00M	-2.40B	-1.45B
	Financing Cash Flow
-692.00M	-1.43B	-1.55B	-409.00M	93.00M	-59.00M

PPG Industries Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 112.60
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PPG, the sentiment is Positive. The current price of 112.6 is above the 20-day moving average (MA) of 111.91, above the 50-day MA of 106.71, and below the 200-day MA of 116.93, indicating a neutral trend. The MACD of 1.08 indicates Positive momentum. The RSI at 57.05 is Neutral, neither overbought nor oversold. The STOCH value of 75.41 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PPG.

PPG Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SHW	78 Outperform	$89.58B	33.83	70.22%	0.84%	0.26%	12.82%
AXTA	77 Outperform	$6.71B	15.04	23.59%	―	0.96%	82.78%
RPM	72 Outperform	$14.84B	23.14	25.53%	1.72%	-0.61%	15.06%
EMN	67 Neutral	$9.10B	10.04	16.16%	4.16%	2.78%	1.50%
DD	66 Neutral	$28.51B	40.24	0.06%	2.32%	4.51%	-121.68%
PPG	64 Neutral	$25.56B	19.07	18.47%	2.42%	-7.67%	-0.58%
Sector *	51 Neutral	$2.02B	-1.14	-21.37%	3.64%	2.88%	-30.57%

PPG Industries Corporate Events

PPG Industries Elects Leon Topalian to Board

On April 17, 2025, PPG Industries‘ Board of Directors elected Leon J. Topalian as a director, effective July 16, 2025, with his term expiring at the 2026 Annual Meeting of Shareholders. Mr. Topalian, who is also the CEO of Nucor Corporation, will join the Audit and Sustainability and Innovation Committees, bringing his expertise to PPG’s strategic operations.