Institutes like the color of PPG Industries

Institutions buy PPG industry despite weak guidance

institutional activity in PPG Industries (NYSE: PPG, The past year has been a bit mixed but net activity is bullish and supports the stock. Institutions have been net buyers for 3 of the last 4 quarters and 7 of the last 8 and hold about 80% stock. Although their activity waned at the end of last year, it has picked up since then. The last two quarters have all seen growth in total activity, total purchases and net purchases, and total purchases reached a multi-year high in the second quarter of 2022. Notably, activity has been mild at the start of the third quarter, but is picking up in the wake of this. Q2 earnings continue to be bullish as well. considering the institutional activity in progress In line with the trend, we see the stock rising above the $134 level once again.


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Analyst sentiment is slightly mixed, but at the same time strongly biased in favor of higher prices. The consensus sentiment is a moderate buy and strengthened from a hold that was placed at the end of the previous quarter. Although the $157 consensus price target is softening, there’s still a roughly 25% upside forecast for the stock, including post-earnings activity. At least 5 analyst notes have come out, including 3 lower price targets and 2 higher ones. The consensus of these 5 is around $143 or 13% above the current price action, but includes a new low target. The new low is $110 and suggests that the stock is overvalued.

PPG Industries quarters up despite mixed reviews

PPG Industries had a good quarter despite mixed reviews and we say “OK” as results are based on higher prices. The company reported net revenue of $4.7 billion for a gain of 7.8% over the prior year and it beat the consensus by $0.04 but the gain is entirely due to higher realized prices. The company says organic sales are up 8% and prices are up 15% compared to two years ago. On a segment basis, Performance Coatings Group and Industrial Coatings Group both reported year-over-year declines in volumes that were offset by higher prices. The bad news is that higher prices are cutting into the top line and will eventually result in a drop in revenue/earnings. The good news is that PPG is rebuilding its margins and generating solid cash flow for investors.

Moving to earnings, the company reported a 200 basis points sequential improvement in margins, which helped deliver solid results at the bottom. The company reported a modest $0.06 YOY improvement in GAAP results, but adjusted $1.81, down from last year’s $1.94, but beat consensus by a dime. The 1.85% dividend yield is protected and dividend king status should be achieved with the next distribution declaration, which may increase to 8% to 10% for investors.

“In the second half of the year, we expect many of our larger businesses, including automotive original equipment manufacturers (OEMs) and aerospace coatings, to deliver strong growth in these end-use markets due to large current supply losses and low inventory. Importantly, we expect our sequential quarterly momentum on operating margin improvement to continue in the third quarter as we work back to our historical margins, and our adjusted earnings will increase on a year-over-year basis.” CEO Michael H. McGarry says.

Technical Outlook: PPG Testing Is Resistance

PPG Industries share prices rose in the wake of the Q2 release and confirmed the presence of resistance. Resistance could be strong but price action has an upward bias so we see a battle brewing between bulls and bears. Assuming that the market can recover above the $134 level, the price could easily move towards the $160 to $170 level. If not, this market may remain confined until there is more clarity on economic activity at the end of the year and early next year.
Institutes Like The Color Of Ppg Industries