• Login
    • Join
  • FOLLOW:
  • Subscribe Free
    • Magazine
    • eNewsletter
    Checkout
    • Magazine
    • News
    • Research
    • Markets & Technologies
    • Raw Materials
    • Top Companies
    • Directories
    • Jobs
    • Events
    • Microsites
    • More
  • Magazine
  • News
  • Research
  • Markets & Technologies
  • Raw Materials
  • Top Companies
  • Directories
  • Jobs
  • Events
  • Microsites
  • Current / Back Issues
    Features
    Business Corner
    Editorial
    Digital Edition
    eNewsletter Archive
    Our Team
    Editorial Guidelines
    Subscribe Now
    Advertise Now
    World Reports
    eBook
    Top Features
    Pigments Market

    The Architectural Paint Market Enjoys a Strong 2022

    The Buyers’ Guide

    Auto Refinish Market

    The 2022 Protective Additives Directory
    Breaking News
    Online Exclusives
    Distributor News
    Financial News
    Paint & Coatings Manufacturer News
    People In the News
    Price Increases
    Product News
    Raw Materials & Equipment
    Video Bites
    Suppliers News
    Live From Shows
    Top News
    Caren Hoffmann Appointed Vice President for BASF Mining Solutions

    Microban International Announces Four Senior Hires

    PPG Completes COLORFUL COMMUNITIES Project in Denmark

    10 Partners of the Automotive Industry Form JV, Cofinity-X

    BASF Recognized as Top Company for Supplier Diversity
    Top Companies report
    Market Research
    White Papers / Tech Papers
    Technical Papers
    Product Spec Sheets
    World Reports
    Adhesives and Sealants
    Aerospace Coatings
    Architectural Coatings
    Automotive Coatings
    Automotive Refinish
    Business Operation
    Color Trends & Forecast
    Construction Chemicals
    Corrosion Control
    Industrial Coatings
    Laboratory Equipment
    Marine Coatings
    Market Trends & Forecast
    Powder Coatings
    Production Equipment
    Radcure Coatings
    Special Purpose Coatings
    Wood Coatings
    "Green" Coatings

    PPG Completes COLORFUL COMMUNITIES Project in Denmark

    PPG’s SEM Products Business Launches VCS Hybrid Cup System for the Refinish Market

    Mankiewicz Selects ‘Feel Good’ Hues for 2023 Colors of the Year

    ROSS Offers Heavy-Duty Three Roll Mills for High Viscosity Dispersions

    PPG Achieves ISO 14001 Certification of Environmental Management System
    Additives
    Binders
    Pigments
    Solvents

    SAFIC-ALCAN to Distribute Scott Bader Acrylics & Rheology Modifiers in France

    EPS Launches New Acrylic DIrect-to-Metal Polymer

    Evonik, Partners Launch PlasCO₂ Project for C4 Chemicals Production

    Dr. Ranjini Murthy to Join Azelis Americas as SVP of Commercial and Digital Excellence

    Univar Solutions Announces New Distribution Relationship
    Company Capabilities
    Buyers Guide
    Distributor Guide
    Add New Company
    International Buyers Guide Companies
    Active Minerals

    Siltech Corporation

    W. R. Grace & Co.

    Shepherd Color Company, The

    EPS
    Industry Events
    Webinars
    Live From Show Event
    Top Events
    Saudi Arabia Coatings Show

    Southern Society for Coatings Technology Annual Meeting and Technology Conference

    Eastern Coatings Show

    CPCA Annual Conference

    66th Annual Sink or Swim
    Companies
    White Papers/Tech Papers
    Product Spec Sheets
    Equipment
    Literature/Brochures
    Videos
    International Buyers Guide Companies
    Active Minerals

    Siltech Corporation

    W. R. Grace & Co.

    Shepherd Color Company, The

    EPS
    • Magazine
      • Current / Back Issues
      • Features
      • Editorial
      • Business Corner
      • Digital Edition
      • eNewsletter Archive
      • Editorial Guidelines
      • Subscribe Now
      • Advertise Now
    • Breaking News
    • Directories
      • Buyers Guide
      • Distributor Guide
      • Corporate Capabilities
      • Trade Associations
      • Add Your Company
    • Markets & Technologies
      • Adhesives and Sealants
      • Aerospace Coatings
      • Architectural Coatings
      • Automotive Coatings
      • Automotive Refinish
      • Business Operation
      • Color Trends & Forecast
      • Construction Chemicals
      • Corrosion Control
      • Industrial Coatings
      • Laboratory Equipment
      • Marine Coatings
      • Market Trends & Forecast
      • Powder Coatings
      • Production Equipment
      • Radcure Coatings
      • Special Purpose Coatings
      • Wood Coatings
      • "Green" Coatings
    • Raw Materials
      • Additives
      • Binders
      • Pigments
      • Solvents
    • World Reports
      • Africa Report
      • China Report
      • India/Asia Pacific Report
      • Europe Report
      • Latin America Report
      • Market Research
      • Russian Report
    • Top Companies
    • Online Exclusives
    • Glossary
    • Slideshows
    • Experts Opinions
    • Blog
    • eBook
    • Infographics
    • Videos
    • Podcasts
    • Whitepapers
    • Jobs
    • Microsites
      • Companies
      • White Papers/Tech Papers
      • Product Spec Sheets
      • Equipment
      • Literature/Brochures
      • Videos
    • Events
      • Industry Events
      • Live From Show Event
      • Webinars
    • About Us
      • About Us
      • Contact Us
      • Advertise With Us
      • Privacy Policy
      • Terms of Use
    Expert's Opinion

    Analyst Provides Key Takeaways After Mixed Results from PPG Industries

    Financial Strength vs. Lackluster Operations

    Analyst Provides Key Takeaways After Mixed Results from PPG Industries
    Related Content
    • EPS
    • PPG Provides Money, Paint for Hungary Primary School Project
    • PPG Supports Coatings and Polymeric Materials at NDSU With $40G Donation
    • TCI Powder Coatings Hires Achitectural & Building Products Segment Manager
    • AkzoNobel Publishes Half-Year and Q2 2017 Results
    Kevin McCarthy, Chemicals Analyst, Vertical Research Partners09.06.17
    PPG Industries (PPG: Buy, $120 PT)
    Financial Strength vs. Lackluster Operations

    • We see more upside in the former vs. incremental downside in the latter. Well, it wasn’t quite the quarter we had bargained for. Adjusted 2Q EPS of $1.83 was in line with consensus, but belied volume deceleration and margin compression in both Performance Coatings and Industrial Coatings. Operationally, PPG is fighting several battles: pricing that lags rising raw material costs, foregone sales of industrial coatings in an effort to defend price, persistent volume pressure in architectural coatings in DIY channels, and deceleration of global auto OEM production, just to name a few. The upshot is that operating margin remains under pressure with net volume growth languishing near zero. Looking ahead, 3Q prospects frankly don’t look too much better, although we’re more optimistic on margin restoration by 4Q. We see far better news on the financial front. PPG shares are relatively inexpensive, the company has substantial dry powder, and we expect management to put it to use forthwith via resumption of meaningful share repurchases in 3Q against an authorization of $1.7bn or 6.1% of equity market capitalization. As a result, we believe residual risk to EPS is rather low, so we’re sticking with PPG shares on the pullback.

    • Our top 10 takeaways are: (1) sales of $3.81bn came in 1.1% below our $3.85bn; (2) EBIT of $650mn paled vs. our $670mn as margins compressed while volume growth stalled to flat from 1.9% in 1Q17; (3) earnings in both Performance Coatings and Industrial Coatings came in light, offset by lower than projected corporate expense due to a decline in variable comp; (4) PPG lost some business in Industrial in an effort to... 

    • Changes to our model: We decrease our 2017 EPS estimate by $0.22 to $6.00, including $1.60E for 3Q17. Drivers include lower projected sales at a lower operating margin, particularly in Industrial Coatings, partially offset by EPS accretion from the pending acquisition of Crown as well as more favorable FX. Likewise, we revised our 2018 EPS estimate lower to $6.45 from $6.60 for similar reasons.

    • We rate PPG shares Buy with a price target of $120. Our target suggests total upside potential of 14%, including an upgraded dividend yield of 1.7% based on PPG’s payout increase of 12.5% to $0.45 per quarter. PPG shares now trade at a 2018 P/E multiple of 16.5x, which represents a discount of 3.0x or 15% vs. the average of three US coatings peers (SHW, AXTA and RPM). Importantly, we estimate that this discount would nearly double pro forma for deployment of PPG’s excess capital vs. coatings peers. Our valuation of PPG is based on an average of two methodologies: DCF analysis and a relative P/E framework. Our DCF analysis suggests a warranted stock price of $121. Using our relative P/E framework wherein we apply a 10% premium to the S&P500 multiple, we calculate warranted value of $119 per PPG share. 

    (Please see full report for details)
    Related Searches
    • coatings
    • ppg industries
    • industrial
    • architectural coatings
    Related Knowledge Center
    • Market Trends & Forecast
    • Business Operation
    Suggested For You
    EPS EPS
    PPG Provides Money, Paint for Hungary Primary School Project PPG Provides Money, Paint for Hungary Primary School Project
    PPG Supports Coatings and Polymeric Materials at NDSU With $40G Donation PPG Supports Coatings and Polymeric Materials at NDSU With $40G Donation
    TCI Powder Coatings Hires Achitectural & Building Products Segment Manager TCI Powder Coatings Hires Achitectural & Building Products Segment Manager
    AkzoNobel Publishes Half-Year and Q2 2017 Results AkzoNobel Publishes Half-Year and Q2 2017 Results
    PPG Directors Approve 13-percent Dividend Increase to 45 Cents Per Share PPG Directors Approve 13-percent Dividend Increase to 45 Cents Per Share
    07. Axalta Coating Systems 07. Axalta Coating Systems
    02. AkzoNobel 02. AkzoNobel
    Merck KGaA, Darmstadt, Germany, and Industry Partners Create New Automotive Coating Effects Merck KGaA, Darmstadt, Germany, and Industry Partners Create New Automotive Coating Effects
    Global Coil Coatings Market Set to Ride at a CAGR of 4.6% Over 2027 Global Coil Coatings Market Set to Ride at a CAGR of 4.6% Over 2027
    Global Coil Coatings Market Set to Ride at a CAGR of 4.6% Over 2027 Global Coil Coatings Market Set to Ride at a CAGR of 4.6% Over 2027
    PPG Completes COLORFUL COMMUNITIES Project at Primary School in Deurne, Belgium PPG Completes COLORFUL COMMUNITIES Project at Primary School in Deurne, Belgium
    PPG Issues Statement Regarding Decision by the Dutch Authority for the Financial Markets PPG Issues Statement Regarding Decision by the Dutch Authority for the Financial Markets
    AkzoNobel Opens New Performance Coatings Facility in Chonburi, Thailand AkzoNobel Opens New Performance Coatings Facility in Chonburi, Thailand
    AkzoNobel Confirms Focus on its own Strategy to Accelerate Growth and Value Creation AkzoNobel Confirms Focus on its own Strategy to Accelerate Growth and Value Creation

    Related Buyers Guide Companies

    • Adhesives and Sealants
      EPS

      EPS

      ...
      Nancy Metzger, Marketing Support 09.21.22

    • Breaking News | Paint & Coatings Manufacturer News
      PPG Provides Money, Paint for Hungary Primary School Project

      PPG Provides Money, Paint for Hungary Primary School Project

      PPG said it expects to complete about 75 more Colorful Community Projects this year.
      08.22.17

    • Breaking News | Paint & Coatings Manufacturer News
      PPG Supports Coatings and Polymeric Materials at NDSU With $40G Donation

      PPG Supports Coatings and Polymeric Materials at NDSU With $40G Donation

      Gifts support the establishment of and scholarships for new professional graduate degree at North Dakota State University.
      08.16.17


    • Breaking News | People in the News
      TCI Powder Coatings Hires Achitectural & Building Products Segment Manager

      TCI Powder Coatings Hires Achitectural & Building Products Segment Manager

      ...
      08.03.17

    • Breaking News | Financial News
      AkzoNobel Publishes Half-Year and Q2 2017 Results

      AkzoNobel Publishes Half-Year and Q2 2017 Results

      ...
      07.25.17

    Loading, Please Wait..
    Trending
    • Minwax Brand Announces Gentle Olive As Its 2022 Color Of The Year
    • PPG Reports Fourth Quarter, Full-Year 2022 Financial Results
    • 10 Partners Of The Automotive Industry Form JV, Cofinity-X
    • BASF Recognized As Top Company For Supplier Diversity
    • Eastman Acquires Dalian Ai-Red Technology
    Breaking News
    • Caren Hoffmann Appointed Vice President for BASF Mining Solutions
    • Microban International Announces Four Senior Hires
    • PPG Completes COLORFUL COMMUNITIES Project in Denmark
    • 10 Partners of the Automotive Industry Form JV, Cofinity-X
    • BASF Recognized as Top Company for Supplier Diversity
    View Breaking News >
    CURRENT ISSUE

    January 2023

    • Pigments Market
    • The Architectural Paint Market Enjoys a Strong 2022
    • View More >

    Cookies help us to provide you with an excellent service. By using our website, you declare yourself in agreement with our use of cookies.
    You can obtain detailed information about the use of cookies on our website by clicking on "More information”.

    • About Us
    • Privacy Policy
    • Terms And Conditions
    • Contact Us

    follow us

    Subscribe
    Nutraceuticals World

    Latest Breaking News From Nutraceuticals World

    NPA Announces Annual Capitol Hill Advocacy ‘Fly-In’ Day
    GOED Elects New Board Officers for 2023
    Aspire Hires Darrec Jones as VP of Business Development
    Coatings World

    Latest Breaking News From Coatings World

    Caren Hoffmann Appointed Vice President for BASF Mining Solutions
    Microban International Announces Four Senior Hires
    PPG Completes COLORFUL COMMUNITIES Project in Denmark
    Medical Product Outsourcing

    Latest Breaking News From Medical Product Outsourcing

    Freudenberg Medical Adds Silicone Extrusion Capabilities in Massachusetts
    Positive Long-Term Prospects for Japanese Diabetes Care Market
    Digital X-Ray is as Effective as Lung Ventilation Perfusion in Detecting CTEPH
    Contract Pharma

    Latest Breaking News From Contract Pharma

    Bristol Myers Squibb 4Q Results
    Actinium, NCI Partner to Develop Actimab-A in AML
    Astellas Announces New President and CEO and Management Structure
    Beauty Packaging

    Latest Breaking News From Beauty Packaging

    Old Spice Introduces New Mascot and Launches ‘Smelf-Confidence’ Campaign
    KVD Beauty Launches Good Apple Serum Foundation
    Interpack 2023 to Focus on Sustainability
    Happi

    Latest Breaking News From Happi

    EvaClean Promotes Nicole Slacik to Executive Vice President, Healthcare
    Personal Care Brand Odele Expands into Ulta Beauty
    Clorox’s Eric Reynolds Elected Chair of American Cleaning Institute’s Board of Directors
    Ink World

    Latest Breaking News From Ink World

    Flexible Packaging Market to Reach $315.5B by 2027 Globally: MarketsandMarkets
    Mexar Limited Awarded OEKO-TEX ECO PASSPORT Certification
    Graphic Packaging Named to Fortune's List of World's Most Admired Companies
    Label & Narrow Web

    Latest Breaking News From Label & Narrow Web

    Fujifilm expands RxD inkjet pigment dispersions color range
    Anderson & Vreeland acquires flexo consumable assets from Grimco
    Hamillroad Software's Bellissima DMS honored in Brazil
    Nonwovens Industry

    Latest Breaking News From Nonwovens Industry

    Avgol to Showcase Algaeing Colorants and Fibers at Filtech
    Uster to Host Webinar on Zero-Level Contamination Control
    Typar Expands Drainable Wrap Line
    Orthopedic Design & Technology

    Latest Breaking News From Orthopedic Design & Technology

    Steady Growth Forecast for Global Orthobiologics Market
    ODT's Most-Read Stories This Week—Feb. 4
    Toetal Solutions Secures $1.8 Million in New Financing
    Printed Electronics Now

    Latest Breaking News From Printed Electronics Now

    onsemi Exceeds 4Q 2022 Expectations
    Emerson Launches Ovation Green Software Portfolio
    Graphene Flagship Researchers Examine Applications for Space

    Copyright © 2023 Rodman Media. All rights reserved. Use of this constitutes acceptance of our privacy policy The material on this site may not be reproduced, distributed, transmitted, or otherwise used, except with the prior written permission of Rodman Media.

    AD BLOCKER DETECTED

    Our website is made possible by displaying online advertisements to our visitors.
    Please consider supporting us by disabling your ad blocker.


    FREE SUBSCRIPTION Already a subscriber? Login