PPG Industries Investors Are Concerned Margin Cycle Turning Lower, Says Analyst
Portfolio Pulse from Shivani Kumaresan
KeyBanc analyst Aleksey Yefremov maintained an Overweight rating on PPG Industries Inc (NYSE:PPG) but lowered the price target from $164 to $162 after Q1 FY24 earnings. The earnings per share were in line with estimates at $1.86, but sales of $4.31 billion missed the $4.43 billion estimate. Despite concerns over margin cycles, the analyst sees petrochemical inflation as manageable and expects improvement into 2024 and 2025. PPG maintained its $8.47 EPS guidance for 2024, with second-quarter volumes expected to grow in low-single-digits.
April 22, 2024 | 5:14 pm
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NEUTRAL IMPACT
PPG Industries Inc's Q1 FY24 earnings met EPS estimates but missed on sales, with a price target reduction from $164 to $162 by KeyBanc. Despite margin concerns, the outlook for 2024 and 2025 remains positive with expected volume growth.
The adjustment in price target by KeyBanc reflects a nuanced view of PPG's financial health and market position. Despite the sales miss for Q1 FY24, the analyst's continued Overweight rating and positive outlook for 2024 and 2025 suggest that the impact on PPG's stock price may be neutral in the short term. The maintained EPS guidance for 2024 and expected volume growth could offset concerns over the missed sales estimate and margin pressures.
CONFIDENCE 90
IMPORTANCE 85
RELEVANCE 100