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Street Talk on PPG: The Analysts’ View ahead of 3Q17

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Analysts’ consensus

PPG Industries (PPG) is actively being tracked by 22 analysts from different brokerage firms. Among these, 55% have recommended a “buy” for the stock, while 45% have recommended a “hold,” but none has given a “sell” as of October 11, 2017.

In the past three months, the analysts’ consensus target price for PPG stock has risen marginally, from $114.80 to the current $115.50, which implies a return potential of 2.8% from its closing price as of October 11, 2017.

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Why analysts are saying “buy” or “hold”

One of the concerns plaguing PPG is its lack of top-line growth. To address this issue, PPG intends to deploy $2.5 billion–$3.5 billion for acquisitions and share repurchases.

In 2Q17, PPG acquired Crown Group, which could help to reduce the gap created by PPG’s exit from the glass business. PPG has also announced that it will resume its share repurchase program from 3Q17.

Individual brokerage firms recommendations

Royal Bank of Canada (RY) has rated PPG Industries a “hold,” with a target price of $109, but PPG is already trading 3.1% above this recommended target price as of October 11, 2017.

KeyCorp (KEY) has rated PPG a “buy,” with a recommended target price of $125.00, which implies a potential return of 11.2% from its closing price of $112.41 as of October 11, 2017.

Bank of America (BAC) has rated PPG as “neutral” and has recommended a target price of $115.00, which implies a potential return of 2.3% from its closing price as of October 11, 2017.

Investors can indirectly hold PPG stock by investing in the Materials Select Sector SPDR Fund (XLB), which has 4.5% of its portfolio in PPG Industries.

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