On Monday, BMO Capital adjusted its stock price target for PPG Industries (NYSE:PPG), a global supplier of paints, coatings, and specialty materials. The firm reduced the target to $161 from the previous $165 while continuing to recommend the stock as Outperform.
The revision follows PPG Industries' recent announcement of a slight decrease in its 2024 outlook, attributed to slower growth in the automotive sector and challenges in the European architectural market. Despite these factors, BMO Capital views the current stock price as undervalued, considering the scale of the reaction to these concerns and the ongoing review and potential sale of assets in the United States and Canada.
BMO Capital anticipates high single-digit earnings per share (EPS) growth for PPG Industries in 2024, with expectations for an increase to low-teens growth in 2025 and 2026. The firm's outlook is buoyed by the company's significant cash flow, which is expected to fund share buybacks and provide additional support for the stock's performance.
The analyst from BMO Capital highlighted the attractiveness of PPG Industries' valuation, noting that it is at its lowest since late 2012. This valuation, combined with the company's growth prospects and strategic financial management, presents what BMO Capital sees as a compelling risk/reward scenario for investors.
In other recent news, PPG Industries, a global supplier of paints, coatings, and specialty materials, has been the focus of multiple analyst adjustments and strategic developments. The company reported its second-quarter adjusted earnings per share (EPS) at $2.50, slightly above the $2.45 estimate from BofA Securities and the consensus of $2.48. Still, sales decreased by 2%, with organic sales remaining flat. BofA Securities adjusted its price target for PPG Industries to $150 from $152, while maintaining a Buy rating.
Mizuho Securities also adjusted its stock target for PPG Industries from $166 to $160, maintaining an Outperform rating. The company's guidance for Q3 and Q4 2024 was slightly below market expectations, leading Mizuho to revise its earnings expectations for 2024 and 2025. Furthermore, BMO Capital maintained an Outperform rating on PPG's stock, albeit with a reduced price target.
PPG Industries plans to invest $300 million in its North American manufacturing operations to boost automotive coatings production. The company also appointed Pascal Tisseyre as the new vice president for government affairs in the Europe, Middle East, and Africa region.
These recent developments reflect a mix of strategic decisions and analyst adjustments for PPG Industries, focusing on the company's performance and strategic actions.
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