With a market cap of around $25 billion, PPG Industries, Inc. (PPG) is a global leader in paints, coatings, and specialty materials. The company serves a wide range of industries, including automotive, aerospace, packaging, industrial equipment, and residential and commercial construction.
Companies valued at $10 billion or more are generally classified as “large-cap” stocks, and PPG Industries fits this criterion perfectly. Operating through its Global Architectural Coatings, Performance Coatings, and Industrial Coatings segments, PPG provides innovative products and solutions across more than 70 countries worldwide.
Shares of the Pittsburgh, Pennsylvania-based company stock have decreased 19.3% from its 52-week high of $137.24. PPG stock has fallen 1.2% over the past three months, lagging behind the Materials Select Sector SPDR Fund's (XLB) 3.7% rise over the same time frame.
Longer term, PPG stock is down 7.3% on a YTD basis, underperforming XLB’s nearly 9% gain. In addition, shares of the company have declined 11.8% over the past 52 weeks, compared to XLB’s marginal drop over the same time frame.
The stock has been trading below its 200-day moving average since last year.
Despite PPG Industries beating revenue expectations with $4.2 billion on Jul. 29, shares fell 5.3% the next day as profit fell to $450 million. Adjusted EPS of $2.22 matched estimates but declined from $2.35 in the prior-year quarter. Additionally, segment weakness, such as a 5% sales drop in Global Architectural Coatings and a 5% decline in Industrial Coatings due to divestitures, outweighing the strength in Performance Coatings.
Moreover, rival The Sherwin-Williams Company (SHW) has outperformed PPG stock. Shares of Sherwin-Williams have risen 5.9% on a YTD basis and dropped 3.7% over the past 52 weeks.
Despite PPG Industries’ underperformance, analysts are moderately optimistic about its prospects. The stock has a consensus rating of “Moderate Buy” from the 25 analysts covering the stock, and the mean price target of $128.50 is a premium of 16.1% to current levels.
On the date of publication, Sohini Mondal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
