A Look at PPG Industries’s Valuation Following New VELOCITY Refinish System Launch and Innovation Focus

PPG Industries (PPG) just rolled out its VELOCITY refinish system, targeting U.S. automotive collision shops with promises of faster, more efficient performance and compliance with tough environmental standards. This launch is making waves not only for its technical advancements but also because it spotlights PPG's broader strategy around innovation and sustainability, key themes that have featured prominently in recent industry reports. For investors tracking the stock, it's a tangible sign that PPG is doubling down on new product development and trying to sharpen its market edge.

That focus comes at a time when PPG shares have posted a 4.3% gain in the past month. Looking back over the year, momentum has been harder to sustain, and the company is still down from where it started. While PPG has brought in annual revenue growth and bolstered net income, its long-term share price trends suggest that optimism has faded since the pandemic-era peaks. Recent highlights, including industry recognition for leadership and fresh investments in eco-friendly technologies, may help restore some investor confidence.

With a bounce this month and renewed attention on PPG’s innovation efforts, a key question for the market is whether these developments are fully reflected in the current share price or if there is more room for growth.

Most Popular Narrative: 28.8% Undervalued

The leading narrative suggests that PPG Industries is currently undervalued by nearly 29% compared to its calculated fair value. According to Dman, the company’s strategic shift towards technology-driven solutions and smart coatings is set to be a long-term catalyst for value creation.

Innovations like electrochromic glass coatings align with global sustainability trends, offering energy savings of 20%-30% in commercial buildings. At the same time, R&D investments in non-BPA coatings for food packaging and lightweight automotive finishes aim to capture $3.2 billion in adjacent specialty chemical opportunities by 2027.

What’s powering this bold valuation? The narrative is driven by projections that blend robust revenue growth, future-focused products, and a profit outlook that could surprise many. Want to uncover the ambitious assumptions behind this double-digit discount? Find out what makes this narrative so bullish and what could turn the tide for PPG’s stock price.

Result: Fair Value of $152.76 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, execution risks around portfolio divestitures and ongoing margin pressures from raw material costs could disrupt the thesis if these factors are not carefully managed.

Find out about the key risks to this PPG Industries narrative.

Another View: SWS DCF Model in Focus

While the narrative leans bullish, our SWS DCF model also finds PPG shares undervalued at current levels. This alignment between distinct methods raises an intriguing question: could both be missing key risks or upside?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out PPG Industries for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own PPG Industries Narrative

If you see things differently, or you like to dive into your own numbers, you can build a custom narrative in just a few minutes. Do it your way.

A great starting point for your PPG Industries research is our analysis highlighting 3 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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