PPG Industries (PPG)
We believe PPG is well positioned for margin recovery & expansion in 2024, given the 2+ year decline in oil prices/input costs and volumes recovering in auto OEM and commercial aero, in particular.
“2023 and 2024 has been and will continue to be a process of recovering margins to pre-COVID levels. The stock got cheap in 3Q23 with the broader sell-off and did not seem to account for the company-specific earnings growth levers for 2024 – the still recovering end markets, the full year impact of 2023 price increases, and now falling raw material prices.”
Colin Dunn – Cambiar Materials Analyst
- PPG is the second-largest coatings/paint company in the world. The industry has attractive returns on capital and compelling market structure, with PPG holding a strong market position, ranked #1 or #2 across most end markets.
- PPG is more diversified than many peers like Sherwin Williams, with exposure to residential re-paint (think DIY painting), auto OEM paint, auto re-finish, commercial aero, marine, and industrial. The company is also geographically diversified.
PPG adheres to Cambiar’s stringent quality underwriting policy, including:
Cambiar identified an attractive entry point characterized as:
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Source: Cambiar Analysis & PPG company disclosure