PPG Industries (PPG) AI Stock Analysis

• Market Cap: $23.12B
• Dividend Yield: 2.71%
• Average Volume (3M): 2.16M
• Price to Earnings (P/E): 14.7
• Beta (1Y): 0.94
• Revenue Growth: -12.98%
• EPS Growth: -11.34%
• Country: US
• Employees: 46,000
• Sector: Basic Materials
• Sector Strength: 58
• Industry: Chemicals - Specialty
• EPS (TTM): 1.51
• Shares Outstanding: 223,494,720
• 10 Day Avg. Volume: 2,546,405
• 30 Day Avg. Volume: 2,160,095
• PEG Ratio: 0.32
• Price to Book (P/B): -6.54
• Price to Sales (P/S): 1.46
• P/FCF Ratio: 19.94
• Enterprise Value/Market Cap: 1.23
• Enterprise Value/Revenue: 1.80
• Enterprise Value/Gross Profit: 4.44
• Enterprise Value/Ebitda: 10.13
• 1Y Price Target: $127.54
• Price Target Upside: 23.29% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): 7.97
• Revenue Forecast (FY): $16.39B

• Rating: 68 Neutral
• Price Target: $111.00 ▲(7.30% Upside)
• Action: Downgraded Date: 01/29/26
• Date: Action: Downgraded 01/29/26

The score is held back primarily by weaker financial resilience signals in the latest statements (negative equity and negative free cash flow), despite solid reported profitability. Technicals are supportive with a strong uptrend, and valuation appears reasonable with a mid-teens P/E and a ~2.4% dividend. The latest earnings call adds a moderately positive tilt via steady 2026 guidance and aerospace-driven momentum, tempered by near-term cost and demand headwinds.

Positive Factors

Diverse end-market exposure

PPG’s revenue derives from multiple end markets—architectural, industrial, automotive, aerospace and packaging—reducing single‑market cyclicality. This diversification supports steadier revenue and margin mix over time, enabling reuse of scale in procurement, R&D and distribution across cycles.

Aerospace growth engine

Aerospace is a high‑value, faster‑growing segment for PPG with record recent sales and double‑digit growth in 2025 and guidance to sustain high‑single‑digit CAGR in 2026. Its structural demand, higher margins and technology intensity provide durable upside to company margins and revenue mix over several years.

Improving margins and pricing power

PPG shows improved net and segment margins driven by pricing, product mix and operational gains. Sustained margin improvement indicates pricing power in specialty coatings and the ability to realize cost savings, supporting durable profitability even if volumes fluctuate across end markets.

Negative Factors

Balance-sheet deterioration

Reported negative equity in 2025 and higher total debt materially weaken PPG’s capital structure versus prior years. This deterioration reduces financial flexibility for reinvestment, share returns or opportunistic M&A, and increases refinancing and covenant risk if adverse conditions persist.

Weak cash generation in 2025

A swing to zero operating cash flow and negative free cash flow undermines the company’s ability to self‑fund capex, repay maturing debt, and sustain distributions. Even with prior strong FCF history, this volatility reduces near‑term financial resilience and elevates dependence on external financing.

Refinish destocking & margin pressure

Refinish is a relatively higher‑margin business; prolonged distributor destocking cut volumes and pressured segment margins. Persistent dealer/distributor order variability and insurance‑driven claims trends reduce visibility and can keep Performance Coatings margins depressed until inventory and channel demand normalize.

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 primarily makes money by formulating, manufacturing, and selling paints and coatings to business customers and consumers, generating revenue from the sale of finished coating products (and, in some cases, related services) across multiple end markets. Key revenue streams typically include: (1) Architectural coatings: sales of interior/exterior paints, stains, and related products to professional contractors and retail/DIY customers, distributed through company-owned paint stores, independent dealers, and other retail channels. (2) Industrial and protective coatings: sales to industrial customers for corrosion protection, asset protection, and performance finishes used on infrastructure, heavy equipment, and manufactured goods; these are often sold directly to OEMs/fabricators and through industrial distribution. (3) Automotive and transportation coatings: sales of coatings used by automotive original equipment manufacturers as well as automotive refinish products sold through distributor networks to body shops; revenue is driven by vehicle production volumes, repair/refinish activity, and product mix. (4) Aerospace and other specialty coatings: sales of high-performance coatings and materials used by aircraft manufacturers, airlines/MRO providers, and other specialized applications. In addition to product sales, PPG’s earnings are influenced by its ability to price for raw-material and energy-cost changes, optimize product mix toward higher-value performance coatings, and leverage scale in manufacturing and procurement. Demand is tied to activity levels in construction, industrial production, automotive builds, and maintenance cycles. Specific partnership arrangements and customer contract terms are not available in this response and are therefore null.

PPG Industries Financial Statement Overview

Summary

Income statement strength (stable revenue with a 2025 pickup and improved net margin) is offset by materially weaker financial resilience signals in the latest data: negative equity on the balance sheet and sharply deteriorated cash conversion (operating cash flow reported at 0 and negative free cash flow in 2025). Overall fundamentals read as mixed, with elevated balance-sheet and cash-flow risk despite solid profitability.

Income Statement

Revenue has been broadly stable over the last several years, with a modest pickup in 2025 (annual revenue growth ~12%). Profitability is solid for the group, with net margin improving to ~9.9% in 2025 from ~7.0% in 2024, and operating profitability remaining healthy. The main weakness is margin volatility (notably a lower gross margin in 2025 vs. 2024) and only moderate consistency in growth, which tempers the quality of earnings profile.

Balance Sheet

Leverage was reasonable in 2022–2024 (debt-to-equity roughly ~0.88–1.16), supporting acceptable shareholder returns. However, 2025 shows a major deterioration with negative equity, which makes leverage metrics unfavorable and suggests a significantly weakened capital position versus prior years. Total debt also increased in 2025, raising balance-sheet risk and reducing financial flexibility despite strong reported earnings.

Cash Flow

Cash generation weakened materially in 2025, with operating cash flow reported at 0 and free cash flow negative (-$778M) versus positive free cash flow in prior years (e.g., $699M in 2024 and $1.895B in 2023). The cash flow trajectory is volatile, including a sharp decline in 2025, indicating reduced ability to self-fund reinvestment and shareholder returns. Prior periods show the business can generate solid free cash flow, but the latest year is a clear setback.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	15.88B	15.85B	16.24B	15.61B	16.80B
Gross Profit	6.03B	6.59B	6.56B	5.64B	6.52B
EBITDA	2.81B	2.58B	2.45B	2.02B	2.50B
Net Income	1.58B	1.12B	1.27B	1.03B	1.44B
Balance Sheet
Total Assets	7.96B	19.43B	21.65B	20.74B	21.35B
Cash, Cash Equivalents and Short-Term Investments	2.22B	1.36B	1.57B	1.15B	1.07B
Total Debt	7.45B	6.39B	6.60B	7.63B	7.47B
Total Liabilities	11.50B	12.47B	13.62B	14.04B	14.94B
Stockholders Equity	-3.54B	6.79B	7.83B	6.59B	6.29B
Cash Flow
Free Cash Flow	1.16B	699.00M	1.90B	477.00M	1.19B
Operating Cash Flow	1.94B	1.42B	2.41B	963.00M	1.56B
Investing Cash Flow	-700.00M	107.00M	-556.00M	-461.00M	-2.40B
Financing Cash Flow	-545.00M	-1.43B	-1.55B	-409.00M	93.00M

PPG Industries Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 103.45
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

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 103.45 is below the 20-day moving average (MA) of 116.23, below the 50-day MA of 115.23, and below the 200-day MA of 107.69, indicating a bearish trend. The MACD of -4.52 indicates Positive momentum. The RSI at 30.95 is Neutral, neither overbought nor oversold. The STOCH value of 7.02 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PPG.

PPG Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PPG	68 Neutral	$23.12B	14.71	33.60%	2.71%	-12.98%	-11.34%
EMN	68 Neutral	$7.94B	15.45	8.09%	5.33%	-3.33%	-19.59%
SHW	67 Neutral	$79.96B	31.08	58.53%	0.98%	0.96%	1.96%
AXTA	65 Neutral	$5.96B	18.46	16.86%	―	-1.83%	40.64%
RPM	63 Neutral	$12.89B	21.09	22.70%	1.96%	3.09%	12.25%
Sector *	61 Neutral	$10.43B	7.12	-0.05%	2.87%	2.86%	-36.73%
DD	56 Neutral	$18.57B	-21.54	-3.77%	1.74%	2.42%	-196.54%