PPG Industries (PPG) Expands Aerospace Capacity Following $70 Million Bet As Fair Value Stays In View

PPG Industries (PPG) is putting fresh capital behind its aerospace ambitions, committing US$70 million to expand its transparencies site in Huntsville, Alabama, as it chases higher demand for aircraft windows.

Recent trading tells a mixed story. PPG Industries’ share price is up 3.6% over the past week and 2.8% over the past month, yet it is down 7.2% over 90 days. The 1 year total shareholder return of 7.9% contrasts with a 5 year total shareholder return decline of 25.4%, suggesting short term momentum has picked up after a weaker multi year stretch as investors weigh fresh aerospace investment alongside the reaffirmed dividend.

Scan beyond PPG Industries and see which materials and coatings peers investors are watching in the 33 high quality undervalued stocks right now.

The aerospace spend, recent share price bump and longer term performance slump pull you in different directions. Does it make more sense to step in at today’s price, or to wait for a cheaper shot at PPG Industries?

Most Popular Narrative: 15% Undervalued

On the most followed view, PPG Industries is worth $126.29 a share, compared with the last close at $107.39. The story hinges on whether its capital projects and cost cuts actually translate into the earnings that narrative assumes.

PPG Industries is building out its aerospace and protective and marine coatings capacity, supported by a roughly US$300 million aerospace backlog and more than US$0.5 billion of related investments. This activity can support higher revenue and segment earnings as orders are fulfilled and converted into shipments.

See why 42 investors see PPG Industries as 15% undervalued.

Result: Fair Value of $126.29 (UNDERVALUED)

Still, the PPG Industries story frays quickly if foreign currency moves cut into reported earnings or if auto production softness continues to pressure Industrial Coatings margins.

Find out about the key risks to this PPG Industries narrative.

Next Steps

Mixed signals around PPG Industries do not have to leave you stuck on the fence. Move quickly through the data and pressure test the narrative for yourself, then weigh both the downside alerts and upside drivers in the 5 key rewards and 1 important warning sign.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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