PPG Industries’ 1Q18 earnings
In a press release on March 21, 2018, PPG Industries (PPG) said it would announce its 1Q18 earnings on April 19, 2018, before the market opens. There will be a teleconference at 2:00 PM EST that same day to discuss the results.
In this series, we’ll be looking at PPG Industries stock since its 4Q17 earnings. We’ll look at analysts’ revenue and EPS estimates and recommendations and the company’s updated short interest position.
PPG Industries announced its 4Q17 earnings on January 18, 2018. Since then, the stock has fallen 7.3% as of April 11, 2018. Let’s look now at its peers. Axalta (AXTA) rose 3.6%, and RPM International (RPM) and Sherwin-Williams (SHW) fell 6.8% and 9.8%, respectively, during the same period. PPG Industries, on a year-to-date basis, has fallen 6.5%.
The decline in PPG stock is primarily due to the high volatility in the stock market that arose from fears of a trade war between the United States and China, fear of more rate hikes than expected by the Fed, and overall political uncertainties. Also, when Lowe’s (LOW) decided not to sell PPG’s Olympic brand, it was negative news that could impact PPG’s revenue in 3Q18. However, PPG has a beta of 1.5, which is the highest among its peers. PPG has managed to report a better performance than SHW and RPM.
Positive developments such as the acquisition of ProCoatings and aggressive share buybacks are encouraging. If PPG manages to beat the estimates, the stock could recover its lost ground so far in 2018.
PPG Industries is trading 5.1% below the 100-day moving average of $115.13, which indicates a downward trend in the stock. Its 14-day RSI (relative strength index) of 43 suggests that the stock is neither overbought nor oversold. An RSI of 70 and above tells us that the stock is overbought, while an RSI of 30 and below is considered oversold.
Investors can indirectly hold PPG Industries by investing in the iShares Edge MSCI Multifactor Materials (MATF), which has invested 2.1% of its portfolio in PPG Industries as of April 11, 2018.
In the next part, we’ll look at analysts’ revenue estimates for PPG Industries in 1Q18.