Back to top

Image: Bigstock

PPG Boosts Automotive OEM Clearcoat Production in Germany

Read MoreHide Full Article

PPG Industries Inc. (PPG - Free Report) has announced the start of expanded automotive OEM clearcoat production at its plant in Erlenbach, Germany. The project, worth €3 million, nearly doubles the site’s capacity for premium clearcoats and utilizes advanced manufacturing technology to improve efficiency, sustainability and flexibility.

PPG took over the Erlenbach site from Hemmelrath in 2019 to uplift its automotive coatings offering and add formulating and manufacturing capability. The new clearcoat facility comes with a fully automated, state-of-the-art and highly sustainable production process boasting shorter and faster manufacturing time and flexible manufacturing of multiple batch sizes of up to 25 metric tons.

PPG stated that it is a vital investment for the company to meet the growing regional demand for its premium clearcoats sustainably. The project promises to make the Erlenbach facility a center of excellence for clearcoats and empower the company to boost its position as a premier producer of the most advanced and innovative clearcoats to meet the demanding OEM quality and performance specifications.

PPG’s shares have gained 4.3% over the past year compared to the industry’s 13% rise. The company’s estimated earnings growth rate for the current year is pegged at 18%.

Zacks Investment ResearchImage Source: Zacks Investment Research

PPG, on its third-quarter call, said that it expects ongoing supply chain disruptions to continue throughout the fourth quarter, with potential additional impacts from the recent industrial production curtailments in China. It forecasts these disruptions to ease modestly in overall quantity and magnitude as the quarter progresses.

It will continue to prioritize further selling price increases and expects price realization to fully offset raw material cost inflation in early 2022.

Moreover, the recovery in the automotive original equipment manufacturer, aerospace and automotive refinish coatings businesses will be a key catalyst in 2022. It will continue to aggressively manage all aspects of its cost structure, the company noted.

PPG also expects net sales volumes to be down 8-10% year over year in the fourth quarter. Corporate expenses are projected to be $50-55 million for the quarter. Net interest expenses are expected between $25 million and $27 million. The company also sees adjusted earnings for the full year to be $6.67-$6.73 per share.

Zacks Rank & Key Picks

PPG currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks from the basic materials space include AdvanSix Inc. (ASIX - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Univar Solutions Inc. (UNVR - Free Report) and Celanese Corporation (CE - Free Report) , carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

AdvanSix has an expected earnings growth rate of 197% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised 14.1% upward over the last 60 days.

AdvanSix beat the Zacks Consensus Estimate for earnings in the four trailing quarters, with an earnings surprise of 47%, on average. ASIX’s shares have also surged 134.9% over a year.

Univar has an expected earnings growth rate of 55.2% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised 9% upward over the past 60 days.

Univar beat the Zacks Consensus Estimate for earnings in the four trailing quarters, with an earnings surprise of 24.1%, on average. UNVR’s shares have rallied 41.4% over a year.

Celanese has an expected earnings growth rate of 139.7% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised 9.1% upward over the last 60 days.

Celanese beat the Zacks Consensus Estimate for earnings in the four trailing quarters and pulled off an earnings surprise of 12.7%, on average. Shares of CE have rallied around 14.8% over a year.


In-Depth Zacks Research for the Tickers Above


Normally $25 each - click below to receive one report FREE:


PPG Industries, Inc. (PPG) - Free Report >>

Celanese Corporation (CE) - Free Report >>

Univar Solutions Inc. (UNVR) - Free Report >>

AdvanSix (ASIX) - Free Report >>