PPG Industries (PPG): Assessing Valuation After Recent Share Price Declines

PPG Industries (PPG) has seen some movement in its stock lately, with shares currently at $98.70. Over the past month and the past three months, the stock is down roughly 5 percent and 12 percent respectively, reflecting recent market sentiment.

See our latest analysis for PPG Industries.

Despite a solid start to the year, momentum for PPG Industries has faded lately, with the share price at $98.70 and the year-to-date share price return at -14.5%. When taking dividends into account, the one-year total shareholder return sits at -17.4%, suggesting investors remain cautious after some recent volatility.

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With shares now trading well below analysts’ targets and recent price declines in focus, the key question is whether the current valuation offers a compelling entry point or if the market anticipates further challenges for PPG Industries.

Most Popular Narrative: 17.6% Undervalued

Compared to the last close of $98.70, the most widely followed narrative calculates a fair value of $119.80, suggesting current prices are well below what analysts see as justified. The valuation hinges on expectations for both cyclical recovery and execution on profitability enhancements.

PPG is beginning to realize the benefits of its enterprise growth strategy started in 2023, with a focus on organic sales growth through strategic investments in innovation, which is expected to impact revenue positively. There is strong performance and expected continued demand in the Aerospace and Protective & Marine Coatings segments, driven by technology advantage products and share gains, which is likely to enhance revenue and earnings.

Read the complete narrative.

Curious what backs up this yawning gap between market price and narrative fair value? The key assumptions for years ahead could surprise even seasoned investors. Blockbuster earnings forecasts and margin improvements are at the heart of this outlook. Click through to discover which bold financial bets set the stage for this price target.

Result: Fair Value of $119.80 (UNDERVALUED)

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

However, persistent foreign currency headwinds or a prolonged downturn in global auto production could challenge the bullish case for PPG’s recovery.

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

Build Your Own PPG Industries Narrative

If the current outlook does not align with your own views or you prefer to rely on your own research, you can dive into the data and build a unique perspective in just a few minutes: Do it your way.

A great starting point for your PPG Industries research is our analysis highlighting 5 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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