PPG Industries (PPG) has been drifting lower this year, even as its latest annual results showed steady revenue and earnings growth. That disconnect is what has investors revisiting the coatings giant’s valuation today.
See our latest analysis for PPG Industries.
Despite a recent 1 month share price return of 4.28 percent, PPG is still down 13.04 percent year to date and its 1 year total shareholder return of negative 18.79 percent underlines that momentum has been fading as investors reassess cyclicality and valuation.
If this defensive pullback has you rethinking where you find steady compounding, it could be worth exploring stable growth stocks screener (None results) as a way to uncover other quality names with more consistent sentiment behind them.
With shares lagging their historical returns despite mid single digit revenue growth and a hefty discount to analyst targets, the key question now is whether PPG is quietly undervalued or whether markets already anticipate slower growth ahead.
Most Popular Narrative Narrative: 15.3% Undervalued
With PPG Industries last closing at $100.37 versus a most popular narrative fair value of $118.45, the story leans toward a recovery thesis rather than a value trap.
PPG is beginning to realize the benefits of its enterprise growth strategy started in 2023, with a focus on organic sales growth through strategic investments in innovation, which is expected to impact revenue positively. There is strong performance and expected continued demand in the Aerospace and Protective and Marine Coatings segments, driven by technology advantage products and share gains, which is likely to enhance revenue and earnings.
Curious how modest growth assumptions, higher margins, and a lower future earnings multiple can still add up to a higher fair value than today? The narrative connects those levers in a way that might surprise you.
Result: Fair Value of $118.45 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, the narrative could unravel if weaker auto production and prolonged geopolitical uncertainty in key regions keep volumes and margins under sustained pressure.
Find out about the key risks to this PPG Industries narrative.
Build Your Own PPG Industries Narrative
If this view does not quite fit your own thinking, you can review the numbers yourself and build a personalized narrative in just a few minutes: Do it your way.
A great starting point for your PPG Industries research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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