PPG Industries, Inc. (PPG), a global leader in paints, coatings, and specialty materials, has experienced a difficult year in the stock market, underperforming the broader S&P 500 Index. With a market cap of $27.7 billion, PPG, founded in 1883 and headquartered in Pittsburgh, Pennsylvania, is recognized for its high-performance solutions across industries such as automotive, aerospace, construction, and industrial applications.
Despite its long history of innovation, PPG stock has struggled recently. Shares are currently trading 20.8% below their 52-week high of $150.82, which was reached on Dec. 28, 2023. Over the past three months, the stock has declined 7.5%, significantly underperforming the S&P 500 Index’s 2.7% gains. On a year-to-date (YTD) basis, PPG has fallen by 20.1%, compared to the S&P 500 gain of 23.1%. Over the past 52 weeks, PPG has dipped 23%, while the S&P 500 has posted a 23% gain.
The stock has been trading below its 200-day moving average since April and its 50-day moving average since October, signaling a bearish trend. The decline has continued following its Q3 earnings release on Oct. 16, where adjusted earnings rose by 2.9% year-over-year to $2.13 per share, but missed the estimate of $2.15. Revenue for the quarter fell 1.3% to $4.58 billion, also falling short of the forecasted $4.65 billion.
Looking ahead, PPG expects flat organic sales and adjusted earnings per share (EPS) at the lower end of its $8.15 to $8.30 range for 2024. The company is focusing on growth opportunities through strategic divestitures and cost management to improve margins. Despite these challenges, PPG has remained focused on long-term success and sustainability.
PPG underperformance also extends to its rivalry with Sherwin-Williams Company (SHW), which has seen a 9.8% gain YTD and an 11.5% rally over the past year. However analysts maintain a moderately optimistic outlook for PPG. Out of the 22 analysts covering the stock, the consensus rating is Moderate Buy, with a mean price target of $148.20, suggesting a potential upside of 24% from its current level.
While PPG faces challenges, including underperformance relative to its peers, analysts believe the company’s focus on cost management and strategic growth could lead to a recovery in the future. Investors will be watching closely to see if PPG can regain momentum in the months ahead.
