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Here's Why You Should Invest in PPG Industries (PPG) Stock
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PPG Industries, Inc. (PPG - Free Report) is benefiting from favorable market conditions, pricing actions, enhanced manufacturing efficiencies, cost discipline and acquisitions.
As a Zacks Rank #1 (Strong Buy) stock, it is an attractive investment opportunity with strong growth prospects.
Estimates Northbound
The Zacks Consensus Estimate for PPG's third-quarter earnings has increased approximately 4.9% over the past three months. The consensus estimate for 2023 has been revised around 3.6% upward during the same period.Positive Earnings Surprise History
PPG has outperformed the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter average earnings surprise of 7.3%.
Healthy Growth Potential
The Zacks Consensus Estimate for 2023 earnings is currently pegged at $7.51, implying year-over-year growth of 24.1%. Moreover, earnings are expected to register 10.4% growth in 2024.
An Outperformer
PPG’s shares are up 10.9% year to date, outperforming the industry’s rise of 8.6%.
Image Source: Zacks Investment Research
Cost Cuts, Pricing and Acquisitions Aid PPG
The company is implementing a cost-cutting and restructuring strategy, as well as optimizing its working capital requirements. The cost savings generated by these restructuring initiatives will serve as a stimulus for the company. PPG Industries has undertaken extensive restructuring efforts to reduce its cost structure, primarily focusing on regions and end-use sectors with adverse business conditions. The company is executing significant restructuring actions to reduce its global cost structure. In the second quarter of 2023, the company delivered about $15 million in incremental cost reductions via restructuring programs and acquisition synergies.
PPG Industries is taking steps to expand its company in an inorganic way. Notable acquisitions such as Tikkurila, Worwag and Cetelon are expected to contribute to the company's top line in 2023, further expanding its market presence and diversifying its product offerings.
PPG Industries has successfully implemented price increases throughout its businesses to mitigate the impact of raw material and other cost inflation and drive margins. Significant progress has been achieved in boosting consolidated segment margins, which were more than 16% in the second quarter, up 330 basis points year over year. The Performance Coatings segment achieved strong margin performance, delivering its highest margins since 2016.
Some other top-ranked stocks in the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , Bunge Limited (BG - Free Report) and Veritiv Corporation .
Capenter Technology currently carries a Zacks Rank #1. The stock has rallied roughly 57.8% in the past year. CRS beat the Zacks Consensus Estimate in three of the last four quarters, while meeting in one. It delivered a trailing four-quarter earnings surprise of 9.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bunge currently carries a Zacks Rank #2 (Buy). The stock has gained roughly 13.7% in the past year. BG beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 20.4%, on average.
Veritiv currently carries a Zacks Rank #2. The stock has rallied roughly 21.2% in the past year. VRTV beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6%, on average.
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Here's Why You Should Invest in PPG Industries (PPG) Stock
PPG Industries, Inc. (PPG - Free Report) is benefiting from favorable market conditions, pricing actions, enhanced manufacturing efficiencies, cost discipline and acquisitions.
As a Zacks Rank #1 (Strong Buy) stock, it is an attractive investment opportunity with strong growth prospects.
Estimates Northbound
The Zacks Consensus Estimate for PPG's third-quarter earnings has increased approximately 4.9% over the past three months. The consensus estimate for 2023 has been revised around 3.6% upward during the same period.Positive Earnings Surprise History
PPG has outperformed the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter average earnings surprise of 7.3%.
Healthy Growth Potential
The Zacks Consensus Estimate for 2023 earnings is currently pegged at $7.51, implying year-over-year growth of 24.1%. Moreover, earnings are expected to register 10.4% growth in 2024.
An Outperformer
PPG’s shares are up 10.9% year to date, outperforming the industry’s rise of 8.6%.
Image Source: Zacks Investment Research
Cost Cuts, Pricing and Acquisitions Aid PPG
The company is implementing a cost-cutting and restructuring strategy, as well as optimizing its working capital requirements. The cost savings generated by these restructuring initiatives will serve as a stimulus for the company. PPG Industries has undertaken extensive restructuring efforts to reduce its cost structure, primarily focusing on regions and end-use sectors with adverse business conditions. The company is executing significant restructuring actions to reduce its global cost structure. In the second quarter of 2023, the company delivered about $15 million in incremental cost reductions via restructuring programs and acquisition synergies.
PPG Industries is taking steps to expand its company in an inorganic way. Notable acquisitions such as Tikkurila, Worwag and Cetelon are expected to contribute to the company's top line in 2023, further expanding its market presence and diversifying its product offerings.
PPG Industries has successfully implemented price increases throughout its businesses to mitigate the impact of raw material and other cost inflation and drive margins. Significant progress has been achieved in boosting consolidated segment margins, which were more than 16% in the second quarter, up 330 basis points year over year. The Performance Coatings segment achieved strong margin performance, delivering its highest margins since 2016.
PPG Industries, Inc. Price and Consensus
PPG Industries, Inc. price-consensus-chart | PPG Industries, Inc. Quote
Other Key Picks
Some other top-ranked stocks in the basic materials space are Carpenter Technology Corporation (CRS - Free Report) , Bunge Limited (BG - Free Report) and Veritiv Corporation .
Capenter Technology currently carries a Zacks Rank #1. The stock has rallied roughly 57.8% in the past year. CRS beat the Zacks Consensus Estimate in three of the last four quarters, while meeting in one. It delivered a trailing four-quarter earnings surprise of 9.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bunge currently carries a Zacks Rank #2 (Buy). The stock has gained roughly 13.7% in the past year. BG beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 20.4%, on average.
Veritiv currently carries a Zacks Rank #2. The stock has rallied roughly 21.2% in the past year. VRTV beat the Zacks Consensus Estimate in three of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6%, on average.