Intel stock extends gains after report of possible U.S. government stake
On Thursday, Mizuho Securities adjusted its outlook on PPG Industries (NYSE: PPG) stock, reducing the price target to $150 from the previous $160 while maintaining an Outperform rating. This change reflects a modest reduction in earnings expectations and a shift in market multiples.
PPG Industries reported its earnings per share (EPS) for the September 2024 quarter at $2.13, which was slightly below the Morgan Stanley USA estimate and Bloomberg consensus of $2.15.
This performance came amid steady year-over-year volume, with declines in auto original equipment manufacturer (OEM) sales, European architectural, and general industrial sectors. These declines were somewhat balanced by growth in seven other business areas within the company.
The analyst noted that the adjusted EPS guidance for the December 2024 quarter is projected to be around $1.66, which is just under the $1.70 to $1.71 range expected by Morgan Stanley USA and the consensus. Despite these figures, PPG Industries has not provided an update on its previously announced intentions to divest its North American decorative paint division.
PPG Industries is still on track to receive pretax proceeds of approximately $310 million in the December 2024 quarter from the sale of a small silicas business. Meanwhile, industry competitors are making strategic moves, with BASF planning to exit its Brazilian architectural paint brand Suvinil and its automotive paint business. Additionally, competitor Akzo Nobel (OTC:AKZOY) has announced a review of its portfolio.
The analyst at Mizuho stands by the Outperform rating for PPG Industries, citing an attractive valuation despite the revised price target. The report suggests that while earnings have been adjusted, the company's overall market position remains strong.
In other recent news, PPG Industries Inc (NYSE:PPG). has agreed to sell its architectural coatings business in the United States and Canada to American Industrial Partners for $550 million. This decision follows PPG's exploration of strategic alternatives for this segment of its operations.
The sale is expected to close between late 2024 and early 2025, pending customary closing conditions. The architectural coatings business in the U.S. and Canada accounted for roughly $2 billion of PPG's 2023 net sales.
Concurrently, PPG has initiated a cost reduction program aimed at achieving annualized pre-tax savings of around $175 million. The program will result in the closure of various facilities and is estimated to affect about 1,800 positions, mainly in Europe and the U.S.
In terms of financial performance, PPG Industries reported mixed results in the third quarter. The company's earnings exceeded estimates, but the revenue fell short. Despite the mixed results, PPG Industries has maintained its full-year 2024 guidance.
Seaport Global Securities sustained its Buy rating on PPG Industries, although the company's sales and margins did not meet the firm's projections. PPG anticipates its 2024 EPS to be at the lower end of the previously provided range of $8.15 to $8.30.
These developments are part of the recent news surrounding PPG Industries.
InvestingPro Insights
PPG Industries' financial health and market position offer additional context to Mizuho's analysis. According to InvestingPro data, PPG boasts a market capitalization of $30.43 billion and a P/E ratio of 21.35, reflecting investor confidence despite recent earnings adjustments. The company's revenue stands at $18.1 billion for the last twelve months, with a modest growth of 1.08%.
InvestingPro Tips highlight PPG's strong dividend history, having raised its dividend for 53 consecutive years and maintained payments for 54 years. This consistent dividend growth, currently yielding 2.09%, underscores the company's financial stability and commitment to shareholder returns, which aligns with Mizuho's Outperform rating despite the lowered price target.
Moreover, PPG's management has been aggressively buying back shares, potentially indicating their belief in the company's undervaluation. This strategy could support the stock price and enhance shareholder value, complementing the analyst's positive outlook on the company's valuation.
For investors seeking a deeper understanding of PPG's financial landscape, InvestingPro offers 5 additional tips, providing a more comprehensive analysis of the company's prospects and potential risks.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.