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On Thursday, Jefferies analyst Laurence Alexander revised the price target for PPG Industries (NYSE:PPG), a leading global paint and coatings company, reducing it to $110 from the previous $115 while maintaining a Hold rating on the stock. Currently trading at $110.55, PPG (WA:IBSP) has analyst targets ranging from $105 to $166, with InvestingPro data showing 11 analysts recently revising earnings estimates downward. The adjustment comes amid expectations of persistent challenges in the automotive sector, which includes both collision and original equipment manufacturer (OEM) trends.
The lowered forecast by Jefferies reflects a less optimistic view on the near-term performance of PPG Industries. Alexander noted that the weaker-than-expected trends in the collision and OEM sectors are anticipated to continue into the first half of 2026. This outlook suggests a protracted period of subdued activity within the automotive industry segments that are key markets for PPG’s products. Despite these challenges, PPG maintains strong fundamentals with annual revenue of $15.68 billion and a healthy gross margin of 41.7%.
The analyst also pointed out that while higher tariffs and shifting trade flows might largely neutralize direct impacts, there would likely be consequential effects on auto production and demand. These trade-related challenges add another layer of complexity to PPG Industries’ operating environment.
Despite these headwinds, Jefferies expects that PPG Industries could see some offsetting benefits. The firm anticipates margin improvements driven by increased productivity and lower costs for raw materials. However, without a significant reduction in interest rates, overall demand for PPG’s offerings is projected to remain lukewarm.
The new price target of $110 reflects a cautious stance on PPG Industries’ stock, balancing the anticipated industry challenges with potential internal efficiency gains. The Hold rating indicates that Jefferies advises investors to maintain their current position in the stock without increasing their holdings for the time being. According to InvestingPro analysis, PPG currently appears undervalued, with a "GOOD" overall Financial Health Score. For deeper insights into PPG’s valuation and comprehensive analysis, investors can access the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, PPG Industries reported impressive financial results for the first quarter of 2025, surpassing analysts’ expectations. The company achieved an adjusted earnings per share (EPS) of $1.72, exceeding the forecast of $1.64, while revenue slightly outperformed projections at $3.68 billion. Additionally, PPG Industries introduced a new eco-friendly product line, PPG ENVIROLUXE™ Plus, incorporating up to 18% post-industrial recycled plastic, aimed at reducing carbon footprints. This move aligns with the company’s commitment to sustainability and offers a durable, environmentally-friendly option for various applications.
Furthermore, Bernstein analysts have given PPG an ’Outperform’ rating, highlighting its strong fundamental profitability and cash flow. The analysts anticipate that PPG’s restructuring efforts will lead to forward EBIT margins comparable to the S&P 500 average. These developments reflect PPG’s strategic focus on organic growth and innovation, positioning the company well in the industrial coatings market. The company’s recent achievements and product innovations underscore its resilience and adaptability in navigating current market challenges.
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