PPG Industries, Inc. (PPG) | Investment Case

1. Company Snapshot

1.a. 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.

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1.b. Last Insights on PPG

PPG Industries' recent performance was negatively impacted by soft demand in Europe and industrial coatings. The company's weak demand in certain segments led to a cut in its full-year earnings outlook to $7.60-$7.70 per share. Despite beating earnings and revenue estimates in Q3, driven by pricing gains and strength in aerospace and protective coatings, the company's growth was hindered. Additionally, customer inventory management in automotive refinish coatings is expected to affect the company. (Source: company reports)

1.c. Company Highlights

Last Price	101.72
Change Percentage	1.04%
Open	101.31
Previous Close	100.67
Market Cap ( Millions)	22825
Volume	973942
Year High	130.05
Year Low	90.24
M A 50	99.92
M A 200	107.77

FCF Yield	2.74%
Dividend Yield	2.73%
ROE	13.70%
Debt / Equity	101.46%
Net Debt / EBIDTA	254.69%
Price To Book	2.94
Price Earnings Ratio	23.02
Price To FCF	36.52
Price To sales	1.62
EV / EBITDA	12.11

2. PPG's Q3 2025 Earnings: A Strong Performance Amidst Challenges

PPG delivered a robust financial performance in Q3 2025, with a 2% increase in sales driven by positive selling prices and volume growth in certain segments. The company's EPS reached a record high of $2.13, surpassing analyst estimates of $2.09. The strong EPS performance was driven by solid sales improvement, aggressive cost management, and consistent cash deployment. The company's EBITDA margin has increased to around 20% due to its portfolio optimization efforts.

Publication Date: Oct -30

                                    📋 Highlights
                                    Record Q3 EPS::
                                                Achieved $2.13 per share, driven by sales growth, cost management, and cash deployment.
Full-Year Guidance::
                                                Adjusted EPS raised to $7.60–$7.70, reflecting resilience despite macroeconomic challenges.
Industrial Coatings Growth::
                                                Sales volumes increased 4%, outpacing industry demand in automotive OEM and packaging coatings.
Refinish Market Challenges::
                                                Mid- to high-teens decline due to destocking, but recovery expected by mid-2026.
Aerospace Momentum::
                                                Double-digit organic sales growth in aerospace and protective coatings, with high IRRs (20s-30s%) on investments.

                                

Segmental Performance

The Global Architectural Coatings segment saw positive selling prices and volume growth in Latin America, offset by lower volumes in Europe and the impact of divestitures. The Performance Coatings segment delivered record net sales, driven by double-digit percentage organic sales growth in aerospace and protective and marine coatings. The Industrial Coatings segment saw sales volumes increase 4%, outpacing industry demand, with strength in automotive OEM coatings and packaging coatings.

Guidance and Outlook

PPG expects low single-digit inflation for the year and has updated its full-year guidance of adjusted earnings per diluted share to a range of $7.60 to $7.70. The company remains confident in its best-in-class productivity solution and expects the refinish business to recover in the middle of 2026. Analysts estimate next year's revenue growth at 3.1%, indicating a moderate growth trajectory.

Valuation

With a P/E Ratio of 22.43 and an EV/EBITDA of 11.92, PPG's valuation appears reasonable, considering its strong financial performance and growth prospects. The company's ROE of 13.7% and ROIC of 7.98% indicate a strong ability to generate returns for shareholders. The Dividend Yield of 2.77% provides a stable source of income for investors.

Strategic Initiatives

PPG is focused on driving consistent organic sales and earnings growth, with a strong and unique growing position across commercial, general aviation, and military. The company's investments in the aerospace business, including a new manufacturing facility, will capitalize on the significant multi-year growth opportunity. As Timothy Knavish noted, the aerospace business is growing much more than inflation, capturing price due to the value they add and increasing physical content.

3. NewsRoom

PPG announces planned retirement of Vince Morales, senior vice president and chief financial officer

Dec -01

Source: businesswire.com

PPG Industries Improves NEXA AUTOCOLOR TURBO VISION Toner System

Nov -24

Source: zacks.com

PPG earns top ‘AAA' sustainability rating from MSCI for second consecutive year

Nov -19

Source: businesswire.com

Joel Greenblatt's Strategic Moves: A Closer Look at SPDR S&P 500 ETF Trust

Nov -14

Source: gurufocus.com

4 Ideal November Buys In Barron's 100 Sustainable Dividend Dogs Of 47 'Safer'

Nov -13

Source: seekingalpha.com

PPG and FIRE-OFF launch packaging recycling program in the Netherlands

Nov -13

Source: businesswire.com

Buy 3 Ideal Dividend Kings Of 24 'Safer' In November's 56

Nov -10

Source: seekingalpha.com

Spire Wealth Management Sells 1,859 Shares of PPG Industries, Inc. $PPG

Nov -06

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.23%)

6. Segments

Performance Coatings

Expected Growth: 2.5%

PPG Industries' Performance Coatings segment growth of 2.5% is driven by increasing demand for automotive refinish coatings, growth in the aerospace market, and expansion in emerging markets. Additionally, the company's focus on innovative products, such as its B1:B2 paint system, and strategic acquisitions are contributing to the segment's growth.

Industrial Coatings

Expected Growth: 1.8%

PPG Industries' Industrial Coatings segment growth of 1.8% is driven by increasing demand from the automotive and aerospace industries, as well as growing adoption of sustainable and eco-friendly coatings. Additionally, the company's strategic acquisitions and investments in emerging markets, such as Asia and Latin America, are contributing to its growth.

7. Detailed Products

Coatings

PPG Industries offers a wide range of coatings for various industries, including automotive, industrial, and architectural markets.

Optical Products

PPG Industries provides optical products, including sunglasses, goggles, and lenses, for various industries, including aerospace, automotive, and sports.

Specialty Materials

PPG Industries offers specialty materials, including silica, silicates, and zeolites, for various industries, including construction, consumer goods, and pharmaceuticals.

Composites

PPG Industries provides composite materials, including fiberglass, carbon fiber, and hybrid materials, for various industries, including aerospace, automotive, and industrial markets.

Silicas

PPG Industries offers silicas, including precipitated silica and silica gel, for various industries, including construction, consumer goods, and pharmaceuticals.

8. PPG Industries, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for PPG Industries, Inc. is medium due to the availability of alternative products and services in the coatings and specialty materials industry.

Bargaining Power Of Customers

The bargaining power of customers for PPG Industries, Inc. is low due to the company's strong brand reputation and diversified customer base.

Bargaining Power Of Suppliers

The bargaining power of suppliers for PPG Industries, Inc. is medium due to the presence of multiple suppliers in the market, but the company's large scale of operations gives it some bargaining power.

Threat Of New Entrants

The threat of new entrants for PPG Industries, Inc. is low due to the high barriers to entry in the coatings and specialty materials industry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The intensity of rivalry for PPG Industries, Inc. is high due to the presence of several established players in the coatings and specialty materials industry, leading to intense competition for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	44.35%
Debt Cost	4.80%
Equity Weight	55.65%
Equity Cost	10.40%
WACC	7.92%
Leverage	79.70%

11. Quality Control: PPG Industries, Inc. passed 6 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Air Products

A-Score: 5.2/10

Value: 3.6

Growth: 5.4

Quality: 4.2

Yield: 6.0

Momentum: 2.5

Volatility: 9.3

1-Year Total Return ->

Ecolab

A-Score: 5.1/10

Value: 1.4

Growth: 5.1

Quality: 6.2

Yield: 2.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

PPG

A-Score: 4.7/10

Value: 3.7

Growth: 2.8

Quality: 6.2

Yield: 5.0

Momentum: 2.0

Volatility: 8.3

1-Year Total Return ->

Sherwin-Williams

A-Score: 4.6/10

Value: 1.4

Growth: 6.4

Quality: 5.9

Yield: 2.0

Momentum: 3.0

Volatility: 9.0

1-Year Total Return ->

DuPont

A-Score: 4.6/10

Value: 4.9

Growth: 3.7

Quality: 4.3

Yield: 4.0

Momentum: 3.0

Volatility: 7.7

1-Year Total Return ->

IFF

A-Score: 4.3/10

Value: 5.1

Growth: 2.3

Quality: 3.4

Yield: 6.0

Momentum: 1.0

Volatility: 8.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

11.55%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.92%

PPG Industries, Inc. - US6935061076

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on PPG

1.c. Company Highlights

Less Volatile

Expensive

Average Quality

Revenues Miss

Fairly Valued

Stable Momentum

Average Growth

Weak Momentum

Earnings Miss

Earnings Beats

Average Yield

Revenues Beats

Better Quality

Lower Growth

2. PPG's Q3 2025 Earnings: A Strong Performance Amidst Challenges

Segmental Performance

Guidance and Outlook

Valuation

Strategic Initiatives

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.23%)

6. Segments

Performance Coatings

Expected Growth: 2.5%

Industrial Coatings

Expected Growth: 1.8%

7. Detailed Products

Coatings

Optical Products

Specialty Materials

Composites

Silicas

8. PPG Industries, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: PPG Industries, Inc. passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

101.71$

Current Price

101.72$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA