PPG Earnings: Volume Growth Remains Constrained, but Moderating Costs Drive Margin Expansion

Narrow-moat PPG reported first-quarter results that came with few surprises. While sales growth was roughly flat compared with a year ago, PPG generated margin expansion despite tepid demand from architectural and industrial end markets. While we expect some headwinds through the year, sequential improvements in industrial and new single-family housing starts should provide some relief. Additionally, first-quarter strength in China and India offers some optimism as European coatings end markets remain muted. We've increased our fair value estimate to $118 from $117 per share due to time value of money.