PPG - PPG Industries: Hit Hard By Costs But There Are Multiyear Growth Tailwinds
- PPG Industries disappointed the Street with a weaker than expected Q2 and lower guidance, as cost inflation undermines margins despite strong recovery growth.
- I don't find the cost inflation pressure surprising, and thus it doesn't change my core thesis on the company, but it does create some near-term challenges for management.
- PPG is leveraged to near-term recoveries in end-markets like autos (OEM and aftermarket) and general industrial, growth in residential construction and packaging, and longer-term opportunities in aerospace.
- With good underlying growth drivers, M&A synergy opportunities and future pricing actions to offset cost, I still like PPG even though it's not a dirt-cheap stock here.
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PPG Industries: Hit Hard By Costs, But There Are Multiyear Growth Tailwinds