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PPG Industries Inc PPG

Morningstar Rating
$139.22 −0.30 (0.22%)
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Company Report

We Still Expect Single-Family Construction and Repair and Remodel Spending to Grow in 2024

New single-family home sales increased 4% in 2023 to 666,000 units, as homebuilders capitalized on a dearth of existing for-sale inventory while also offering more sales incentives, cutting base home prices, and building smaller homes to improve affordability. By the fourth quarter of 2023, homebuilders began to pull back on sales incentives as the average 30-year fixed mortgage rate retreated from 7.62% in October 2023 to 6.64% in January 2024. However, mortgage rates have trended higher recently, and we now forecast the average 30-year fixed rate will be 6.50% in 2024, up from our previous forecast of 6.10%. Even so, that’s lower than the 2023 average of 6.81%, and we think homebuilders won’t hesitate to increase sales incentives if needed; they still enjoyed above-average gross profit margins last year with elevated incentives. As such, in 2024, we think new-home sales will increase 9% to 730,000 units and single-family housing starts will increase 4% to 985,000 units. However, we expect total housing starts will decline roughly 5% to 1,345,000 units due to a 23% decline in multifamily starts to 360,000 units, as there’s currently approximately 1,000,000 multifamily units under construction—the largest backlog in at least 50 years.

Price vs Fair Value

PPG is trading at a 19% premium.
Price
$139.22
Fair Value
$112.00
Uncertainty
Medium
1-Star Price
$679.12
5-Star Price
$13.90
Economic Moat
Bbqbmhz
Capital Allocation
Wsrqclfc

Bulls Say, Bears Say

Bulls

The company operates in a diverse range of end markets, leading to stable earnings even during industry-specific slowdowns.

Bears

PPG has a focus on the lower-margin and highly competitive industrial coatings market. Its architectural business is only a third of total revenue.

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News

Trading Information

Previous Close Price
$139.52
Day Range
$138.52140.00
52-Week Range
$120.33152.89
Bid/Ask
$138.42 / $139.66
Market Cap
$32.75 Bil
Volume/Avg
1.8 Mil / 1.8 Mil

Key Statistics

Price/Earnings (Normalized)
18.15
Price/Sales
1.81
Dividend Yield (Trailing)
1.85%
Dividend Yield (Forward)
1.85%
Total Yield
2.11%

Company Profile

PPG is a global producer of coatings. The company is the world's largest producer of coatings after the purchase of selected Akzo Nobel assets. PPG's products are sold to a wide variety of end users, including the automotive, aerospace, construction, and industrial markets. The company has a footprint in many regions around the globe, with less than half of sales coming from North America in recent years. PPG is focused on its coatings and specialty products and expansion into emerging regions, as exemplified by the Comex acquisition.
Sector
Basic Materials
Industry
Specialty Chemicals
Stock Style Box
Mid Core
Total Number of Employees
53,000

Competitors

Valuation

Metric
PPG
MAS
SHW
Price/Earnings (Normalized)
18.1520.0232.45
Price/Book Value
4.1823.09
Price/Sales
1.812.213.78
Price/Cash Flow
15.7515.0123.44
Price/Earnings
PPG
MAS
SHW

Financial Strength

Metric
PPG
MAS
SHW
Quick Ratio
0.961.020.41
Current Ratio
1.471.680.83
Interest Coverage
7.5112.598.39
Quick Ratio
PPG
MAS
SHW

Profitability

Metric
PPG
MAS
SHW
Return on Assets (Normalized)
8.42%16.37%11.15%
Return on Equity (Normalized)
24.67%73.63%
Return on Invested Capital (Normalized)
12.67%28.30%18.14%
Return on Assets
PPG
MAS
SHW
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