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PPG Industries (PPG) Touches New 52-Week High - Analyst Blog

Shares of PPG Industries Inc.PPG touched a new 52-week high of $237.75 on Mar 2, 2015, surpassing its previous high of $237.41 registered on Feb 25, 2015, and eventually closing the day a notch lower at $237.70.

The coatings company, with a market cap of roughly $32.3 billion, has seen its shares rise around 22% over the past one year. Average volume of shares traded over the last three months is roughly 762.8K.

What's Driving PPG Up?

PPG Industries posted its fourth-quarter 2014 results in Jan 2015. It registered adjusted earnings of $2.11 a share in the fourth quarter, up roughly 25.6% from $1.68 per share reported in the year-ago quarter. Earnings topped expectations on volume gains across major regions and synergies from acquisitions.

Revenues were up around 6% year over year at $3,707 million in the reported quarter, surpassing expectations on gains across aerospace and automotive refinish businesses.

The acquisition of Akzo Nobel's North American architectural coatings business has reinforced PPG Industries' branded paint product offerings and scale in the North American architectural paint market. The company has already realized its targeted annual synergies from the buyout.

Moreover, the buyout of Mexico's leading paint company, Comex, for $2.3 billion represents a major move by PPG Industries. This acquisition reinforces its architectural coatings business in Mexico and Central America by offering a leading architectural coatings portfolio.

Recently, PPG Industries made an offer to buy a majority stake in the aerospace and automotive sealants businesses of France-based sealants and adhesives products supplier, Le Joint Francais. This will likely enable PPG Industries to provide its aerospace and automotive clients with a broader geographic reach and a vast spectrum of automotive products.

Further, PPG Industries recently declared plans to expand its precipitated silica production capacity in Delfzijl, Netherlands by more than 15,000 tons per year to address the growing global requirement for Agilon performance silica products.

PPG Industries will remain committed to effectively deploy cash on further earnings-accretive opportunities. The company expects growth to remain mixed region-wise in 2015, with North America and Asia continuing to grow at levels that are in tandem with 2014. The company envisions overall growth in Europe to remain subdued and mixed by country.

PPG Industries has been pursuing an aggressive cost-cutting and restructuring strategy. It is has also been taking steps toward growing its business inorganically by making a number of acquisitions. The company spent $2.5 billion on acquisitions in 2014. It expects to deploy $1.5-$2.5 billion of cash in the 2015-2016 period on acquisitions and share buybacks.

PPG Industries is a Zacks Rank #3 (Hold) stock.

Stocks to Consider

Better-ranked stocks in the chemical space include Asahi Kasei Corp. AHKSY , Innospec Inc. IOSP and Air Products & Chemicals Inc. APD . While Asahi Kasei and Innospec sport a Zacks Rank #1 (Strong Buy), Air Products carries a Zacks Rank #2 (Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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