Skip to Content

PPG Industries Inc PPG

Rating as of

Morningstar’s Analysis

Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price


5-Star Price


Economic Moat


Capital Allocation


PPG Is Battling Through Supply Chain Disruptions and Inflation but Still Sees Strong Demand

Analyst Note

| Brian Bernard, CFA, CPA |

Shares of narrow-moat rated PPG slumped on July 20 after the firm reported second-quarter earnings that missed guidance and the FactSet consensus estimate. Adjusted EPS of $1.94 fell short of management's $2.15-$2.20 guidance and the $2.20 consensus estimate. PPG's earnings miss was primarily due to higher-than-expected raw material costs as well as supply chain issues for both the company and its customers. Raw material costs increased by a mid- to high-teens percentage year over year compared with management's expectations of high-single-digit inflation. Management also estimates that supply chain disruptions across the firm's end markets resulted in a $200 million revenue shortfall compared with earlier estimates of $70 million-$90 million. PPG has increased prices and cut costs to help offset these headwinds. Selling prices increased 3.5% during the second quarter, and we expect the firm will continue to take pricing actions during the rest of fiscal 2021. On the cost side of the equation, the firm saved $40 million during the quarter and raised its full-year cost-takeout target 10% to $135 million.

Read Full Analysis

Company Profile

Business Description

PPG is a global producer of coatings. The company is the world's largest producer of coatings after the purchase of selected AkzoNobel 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.

One PPG Place
Pittsburgh, PA, 15272
T +1 412 434-3131
Sector Basic Materials
Industry Specialty Chemicals
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2021
Stock Type Cyclical
Employees 46,900


Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.

We’d like to share more about how we work and what drives our day-to-day business.

We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.

How we use your information depends on the product and service that you use and your relationship with us. We may use it to:

  • Verify your identity, personalize the content you receive, or create and administer your account.
  • Provide specific products and services to you, such as portfolio management or data aggregation.
  • Develop and improve features of our offerings.
  • Gear advertisements and other marketing efforts towards your interests.

To learn more about how we handle and protect your data, visit our privacy center.

Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.

To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.

Read our editorial policy to learn more about our process.