Back to top

Image: Bigstock

PPG Industries (PPG) Up 19% in 3 Months: What's Driving It?

Read MoreHide Full Article

PPG Industries Inc.’s (PPG - Free Report) shares have popped 19% over the past three months. The company has also outperformed its industry’s rise of 15.7% to over the same time frame.

PPG Industries, a Zacks Rank #3 (Hold) stock, has a market cap of roughly $30.2 billion and average volume of shares traded in the last three months is around 1,152.4K. The company has an expected long-term earnings per share growth of 9.3%.


 

Let’s take a look into the factors that are driving this paint giant.

What’s Favoring the Stock?

Forecast-topping earnings performance in the third quarter has contributed to the gain in PPG Industries’ shares. The company’s adjusted earnings per share of $1.67 for the third quarter went up from $1.45 in the prior-year quarter. It also topped the Zacks Consensus Estimate of $1.61.

Notably, PPG Industries has outpaced the Zacks Consensus Estimate in each of the trailing four quarters. In this timeframe, the company has delivered a positive average earnings surprise of 6.1%.

The company is gaining from its cost management initiatives, pricing actions and strategic acquisitions amid headwinds including soft industrial demand.

PPG Industries is aggressively managing costs and is also implementing appropriate pricing actions. It remains focused on improving its cost structure and recovering margins through price increases amid an inflationary environment.

PPG Industries’ cost savings programs delivered around $20 million in savings in the third quarter. The company expects to achieve another $20 million in cost savings in the fourth quarter. PPG Industries is also implementing a new cost-savings program, which targets full-year run-rate savings of roughly $125 million once completed.

The company is also taking steps to grow business inorganically through strategic acquisitions. The company, earlier this year, completed the acquisitions of Whitford Worldwide and Hemmelrath. It expects these two along with the SEM Products acquisition to add around $400 million in annualized revenues. PPG Industries also completed the buyout of specialty materials maker, Dexmet Corporation, in the third quarter.

PPG Industries also remains committed in its cash deployment with a focus on shareholder value creation over the long term. The company, in July 2019, raised its quarterly dividend by 6% to 51 cents per share.

Stocks to Consider

Better-ranked stocks worth considering in the basic materials space include Kirkland Lake Gold Ltd. , Agnico Eagle Mines Limited (AEM - Free Report) and Franco-Nevada Corporation (FNV - Free Report) .

Kirkland Lake Gold has projected earnings growth rate of 96.3% for the current year and sports a Zacks Rank #1 (Strong Buy). The company’s shares have surged around 105% in a year’s time. You can see the complete list of today’s Zacks #1 Rank stocks here.

Agnico Eagle has a projected earnings growth rate of 168.6% for the current year and carries a Zacks Rank #2 (Buy). The company’s shares have rallied roughly 66% in a year’s time.

Franco-Nevada has estimated earnings growth rate of 46.2% for the current year and carries a Zacks Rank #2. The company’s shares have shot up roughly 44% in a year’s time.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


See More Zacks Research for These Tickers


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


PPG Industries, Inc. (PPG) - free report >>

Agnico Eagle Mines Limited (AEM) - free report >>

Franco-Nevada Corporation (FNV) - free report >>

Published in