On Tuesday, BMO Capital has adjusted its price target for PPG Industries (NYSE:PPG), a global supplier of paints, coatings, and specialty materials. The new target is set at $165, decreased from the previous $168, while the firm maintains an Outperform rating on the stock.
PPG Industries is currently perceived as undervalued by BMO Capital, trading near its 10-year valuation lows, excluding the period affected by COVID-19. The company is experiencing a favorable raw material environment, which is expected to contribute to a gradual increase in growth across several of its business segments within the next 12 to 18 months.
The analyst highlighted PPG Industries' strong balance sheet and free cash flow, which provide the company with the flexibility to undertake opportunistic actions and share buybacks. The potential divestiture of the U.S. Arch business, anticipated by the third quarter of 2024, is predicted to positively impact the company's margins, earnings per share (EPS), and enable more aggressive buyback strategies.
InvestingPro Insights
For investors seeking additional context on PPG Industries, InvestingPro offers real-time data and expert analysis to complement the latest analyst adjustments. According to InvestingPro data, PPG Industries boasts a market capitalization of $30.76 billion and a trailing twelve-month P/E ratio of 19.72, suggesting a significant presence in the market and a valuation that may catch the eye of value-oriented investors. The company's revenue shows modest growth over the last twelve months as of Q1 2024, with a 2.56% increase, indicating steady business performance.
From an investment standpoint, PPG Industries stands out with a high shareholder yield and a commendable track record of dividend reliability, having raised its dividend for 53 consecutive years. These InvestingPro Tips highlight the company's commitment to returning value to shareholders, a factor that might be particularly appealing to income-focused investors. Additionally, the stock's low price volatility could be a reassuring factor for those looking to maintain a stable portfolio.
For those interested in a deeper analysis, InvestingPro offers more tips on PPG Industries, which can be accessed through their platform. These additional insights may provide investors with a more comprehensive understanding of the stock's potential. To benefit from the full range of expert tips and data, use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. Note that analysts have recently revised their earnings downwards for the upcoming period, which could be a point of consideration for prospective investors.
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