PPG - Embedded Expectations Analysis - 2020 02 24
ï€ PPG Industries, Inc. (PPG:USA) currently trades near recent averages relative to UAFRS-based (Uniform) Earnings, with a 23.3x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about sales volume, sales growth, and M&A opportunitiesï€ Specifically, management is confident sales volume was down as a result of weak production across most of their general industrial end use markets and that their Chinese and other Asian auto OEM volumes underperformed significantly. Moreover, they may lack confidence in their ability to sustain above-market growth in their PPG timeless product line, beat year-over-year and quarterly aerospace sales comps, and gain market share in Europe. Furthermore, management may be concerned about farmer spending trends, their capital expenditures, and the size of their M&A transactions. Finally, they may lack confidence in their ability to sustain cash flows and realize higher selling prices in each major region
PPG Industries manufactures and distributes a range of paints, coatings and specialty materials. The company's business is comprised of two reportable business segments: Performance Coatings, which primarily supplies a variety of protective and decorative coatings, sealants and finishes along with paint strippers, stains and related chemicals, as well as transparencies and transparent armor; and Industrial Coatings, which primarily supplies a variety of protective and decorative coatings and finishes along with adhesives, sealants, metal pretreatment products, optical monomers and coatings, precipitated silicas and other specialty materials.
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