PPG Earnings: Selling Price Gains Drive Growth Despite Economic Uncertainty

Narrow-moat PPG reported first-quarter results that were largely in line with our expectations. While demand across its end markets remains mixed, the company continues to push through price increases, with selling prices rising 8% year over year. Price growth continues to drive the story for PPG as overall demand tempers, leading to a roughly 3% decline in volume year over year. Moreover, management noted a slowdown in raw material cost increases and additional improvements in availability. This is a welcome change for PPG, and we think it will provide an opportunity for margin expansion through the year. We've increased our fair value estimate to $114 from $112 per share due to time value of money.