Update shared on 21 Dec 2025
Fair value Increased 0.46%Analysts have nudged our PPG Industries fair value estimate slightly higher to $119.00 from $118.45, reflecting expectations for modestly improved profitability and valuation support, despite a series of trimmed but still constructive Street price targets in the $112 to $129 range.
Analyst Commentary
Street research remains mixed but generally constructive on PPG, with recent actions combining modest target cuts and at least one notable rating upgrade. The updated views reflect a balance between near term macro uncertainty and confidence in the company’s longer term earnings power and multiple expansion potential.
Bullish Takeaways
- Bullish analysts argue that the recent share price weakness exceeds the deterioration in fundamentals, creating scope for valuation to re rate as cyclically depressed earnings normalize.
- JPMorgan’s upgrade to Overweight underscores the view that current earnings are being constrained by temporary macro headwinds rather than structural demand erosion. This supports the case for reaccelerating growth into 2026.
- Upside to the stock is seen if PPG executes on cost controls and mix improvement while benefiting from an eventual rebound in industrial and commodity exposed volumes.
- Price targets in the low to mid $120s range still imply upside from recent trading levels. This suggests investors are being paid to wait for a cyclical recovery and margin expansion.
Bearish Takeaways
- Bearish analysts are trimming price targets toward the low to mid $110s, reflecting concern that weaker macro conditions and inconsistent industrial demand will cap multiples and earnings revisions in the near term.
- Expectations for a stronger second half have faded, with commentary highlighting slippage in commodity oriented businesses and limited seasonal support, which may pressure operating leverage.
- Neutral rated views emphasize execution risk around navigating a choppy volume environment while sustaining pricing and margins, leaving limited room for near term upside surprises.
- With multiple firms cutting targets, the Street is signaling a more muted risk reward profile over the next few quarters. This is contingent on evidence of volume stabilization and clearer visibility into 2025 to 2026 earnings growth.
What's in the News
- Long serving chief financial officer Vince Morales plans to retire on July 1, 2026. PPG has launched an internal and external search for his successor as part of a planned succession process (Key Developments).
- PPG introduced a new ultrafiltration antifouling membrane for industrial water treatment, designed for hard to treat oily waste streams and produced without intentionally added PFAS. The company is expanding capacity at its Barberton, Ohio facility (Key Developments).
- The company completed a $690 million share repurchase program, buying back more than 6 million shares, or about 2.6% of shares outstanding, under its April 18, 2024 authorization (Key Developments).
- PPG launched its ENVIROCRON Extreme Protection Edge Plus powder coating, a one coat edge protection technology aimed at improving corrosion resistance and finish quality for heavy duty and industrial applications (Key Developments).
- PPG introduced the MIX'n'Shake automated stirring system for automotive refinish, integrated with the PPG LINQ digital ecosystem, to improve paint consistency, reduce waste and save shop labor time (Key Developments).
Valuation Changes
- Fair Value Estimate: Risen slightly to $119.00 from $118.45, reflecting a modestly more constructive profitability outlook.
- Discount Rate: Edged down marginally to approximately 8.00% from 8.01%. This indicates a barely lower assumed cost of capital.
- Revenue Growth: Trimmed slightly to about 2.69% from 2.77%, signaling a modestly more cautious top line outlook.
- Net Profit Margin: Increased slightly to roughly 11.51% from 11.48%, reflecting incremental efficiency and mix improvements.
- Future P/E: Nudged higher to about 16.56x from 16.49x. This implies a small upward adjustment to the long term earnings multiple assumption.
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