đ usncan Note: Buy or Fear PPG Industries Stock?
Disclaimer: This content has been prepared based on currently trending topics to increase your awareness.
GERMANY – 2025/01/08: In this photo illustration, the PPG Industries, Inc. logo seen displayed on a monitor. (Photo Illustration by Igor Golovniov/SOPA Images/LightRocket via Getty Images)
SOPA Images/LightRocket via Getty Images
PPG Industries (NYSE:PPG) stock seems extremely unappealing â making it a very poor choice to buy at its current price of approximately $105. PPG Industries is a prominent global provider of paints, coatings, and specialty materials. We believe there are multiple significant concerns regarding PPG stock, rendering it quite unattractive as its current valuation appears moderate.
We reach our conclusion by assessing the current valuation of PPG stock alongside its operational performance over recent years, in addition to its current and historical financial status. Our examination of PPG Industries across key parameters of Growth, Profitability, Financial Stability, and Downturn Resilience reveals that the company exhibits very weak operating performance and financial standing, as outlined below. That said, if you are looking for upside with lower volatility compared to individual stocks, the Trefis High Quality portfolio offers an alternative â having outperformed the S&P 500 and yielding returns exceeding 91% since its inception.
How Does PPG Industriesâ Valuation Compare to The S&P 500?
When evaluating the cost per dollar of sales or profit, PPG stock is presently valued comparably to the broader market.
⢠PPG Industries has a price-to-sales (P/S) ratio of 1.7 compared to a figure of 3.1 for the S&P 500
⢠Moreover, the companyâs price-to-free cash flow (P/FCF) ratio is 30.9 in contrast to 20.3 for S&P 500
⢠Additionally, it has a price-to-earnings (P/E) ratio of 22.2 against the benchmarkâs 22.8
How Have PPG Industriesâ Revenues Changed Over Recent Years?
PPG Industriesâ Revenues have decreased over recent years.
⢠PPG Industries has experienced its top line decline at an average rate of 5.2% over the last 3 years (vs. a rise of 5.3% for S&P 500)
⢠Its revenues have dropped 6.7% from $16 Bil to $15 Bil in the last 12 months (vs. an increase of 4.4% for S&P 500)
⢠Furthermore, its quarterly revenues decreased 4.3% to $3.7 Bil in the most recent quarter from $3.8 Bil a year prior (vs. a 4.5% increase for S&P 500)
How Profitable Is PPG Industries?
PPG Industriesâ profit margins are significantly less favorable than those of most companies in the Trefis coverage universe.
⢠PPG Industriesâ Operating Income over the last four quarters was $2.2 Bil, which corresponds to a poor Operating Margin of 14.8% (vs. 18.3% for S&P 500)
⢠PPG Industriesâ Operating Cash Flow (OCF) over this timeframe was $1.5 Bil, indicating a poor OCF Margin of 10.0% (vs. 19.8% for S&P 500)
⢠During the last four-quarter period, PPG Industriesâ Net Income was $1.1 Bil â signifying a poor Net Income Margin of 7.4% (vs. 11.8% for S&P 500)
Is PPG Industries Financially Stable?
PPG Industriesâ balance sheet appears decent.
⢠PPG Industriesâ Debt amounted to $7.9 Bil at the conclusion of the most recent quarter, while its market capitalization stands at $24 Bil (as of 7/30/2025). This leads to a moderate Debt-to-Equity Ratio of 32.5% (vs. 23.4% for S&P 500). [Note: A low Debt-to-Equity Ratio is preferable]
⢠Cash (including cash equivalents) constitutes $1.9 Bil of the $21 Bil in Total Assets for PPG Industries. This results in a moderate Cash-to-Assets Ratio of 9.0% (vs. 6.7% for S&P 500)
How Resilient Is PPG Stock During A Downturn?
PPG stock has performed worse than the benchmark S&P 500 index during several recent downturns.
Inflation Shock (2022)
⢠PPG stock dropped 40.5% from a peak of $182.33 on 4 June 2021 to $108.50 on 16 June 2022, compared to a peak-to-trough decline of 25.4% for the S&P 500
⢠The stock is still yet to bounce back to its pre-Crisis high
⢠The highest the stock has reached since then is 151.67 on 12 July 2023, and it currently trades at approximately $105
Covid Pandemic (2020)
⢠PPG stock fell 45.7% from a peak of $133.49 on 1 January 2020 to $72.50 on 23 March 2020, compared to a peak-to-trough decrease of 33.9% for the S&P 500
⢠The stock fully recovered to its pre-Crisis peak by 8 October 2020
Global Financial Crisis (2008)
⢠PPG stock decreased 65.4% from a peak of $41.10 on 23 July 2007 to $14.24 on 5 March 2009, compared to a peak-to-trough decline of 56.8% for the S&P 500
⢠The stock fully recovered to its pre-Crisis peak by 20 December 2010
Putting All The Pieces Together: What This Indicates For PPG Stock
In conclusion, PPG Industriesâ performance across the parameters outlined above is summarized as follows:
⢠Growth: Very Weak
⢠Profitability: Very Weak
⢠Financial Stability: Neutral
⢠Downturn Resilience: Very Weak
⢠Overall: Very Weak
This isnât adequately reflected in the stockâs moderate valuation, which is why we regard it as very unattractive, reinforcing our view that PPG is currently a very poor stock to invest in.
While it would be wise to steer clear of PPG stock for the time being, you might want to consider the Trefis Reinforced Value (RV) Portfolio, which has outperformed its all-cap stocks benchmark (a combination of the S&P 500, S&P mid-cap, and Russell 2000 benchmark indices) and delivered strong returns for investors. What accounts for this? The quarterly rebalanced mix of large-, mid-, and small-cap RV Portfolio stocks provides an adaptive strategy to capitalize on favorable market conditions while mitigating losses when markets downturn, as detailed in RV Portfolio performance metrics.
