PPG Industries Inc PPG

PPG Earnings: Mixed End-Market Demand Offsets Higher Selling Prices and Raw Material Deflation

Narrow-moat PPG reported second-quarter results that were largely in line with our expectations. Net sales fell 1.5% year over year, largely due to weakness in the company's industrial coatings business. End-market demand across PPG's portfolio remains mixed, as strength in aerospace and packaging was offset by weakness in automotive original equipment manufacturer, or OEM, and muted demand in Europe. Nevertheless, PPG continues to experience solid demand in Mexico and China, which should offset demand headwinds across other areas of its portfolio in the second half of the year. As such, we maintain our $118 fair value estimate.