What Investors Neet to Know About PPG Stock Ahead of Earnings

The equity is up 21% year-over-year

Jan 4, 2022 at 11:40 AM
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PPG Industries, Inc. (NYSE:PPG) is an American company that supplies paints, coatings, and specialty materials globally. PPG, headquartered in Pittsburgh, operates in more than 75 countries around the world.

On Dec. 21, PPG Industries announced a $2.7 million investment to expand its powder coatings manufacturing capabilities at its facility in the Brazilian state of Sao Paulo. The project will increase the plant’s production capacity for powder coatings by approximately 40%, and will start the third quarter of 2022. PPG added that the investment will help push it to its goal of making 40% of its sales from sustainably advantaged products by 2025, while also increasing production capacity to meet growing demand among its South American customers.

Additionally, PPG Industries is slated to release its fourth-quarter financial results after the close on Thursday, Jan. 20. Wall Street analysts anticipate that PPG will report earnings of $1.20 per share in its upcoming report.

PPG Industries stock has increased about 21% year-over-year. The security has enjoyed support from its 200-day moving average during the last quarter, with the 320-day moving average capturing two pullbacks since October. Moreover, PPG Industries stock offers a forward dividend of $2.36 with a dividend yield of 1.38%.

ppg dec 4

Overall, PPG Industries stock’s fundamentals are not the greatest. PPG has a weak balance sheet with $1.31 billion in cash and $7.7 billion in total debt. PPG Industries stock also has a relatively high valuation with a price-earnings ratio of 27.46 and a price-sales ratio of 2.39. In addition, the specialty supplies company experienced two consecutive years of top- and bottom-line declines recently. PPG’s revenues and net income dropped 10% and 21%, respectively, between fiscal 2018 and fiscal 2020.

On a more positive note, PPG has increased its trailing 12-month revenues and net income by 18% and 35%, respectively, since fiscal 2020.Plus, its forward price-earnings ratio sits at around 19.80. Nonetheless, PPG stock doesn’t seem to offer enough return potential for the level of risk the company’s fundamentals present.

 

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