PPG Industries Hits New 52-Week High: What's Driving it?

Shares of PPG Industries PPG scaled a fresh 52-week high of $134.36 during the trading session on Dec 13, before retracting to close at $133.01.

The Zacks Rank #3 (Hold) stock has a market cap of $31.5 billion. The company expects long-term earnings per share growth rate of 9.3%. It surpassed the Zacks Consensus Estimate for earnings in each of the trailing four quarters, delivering a positive surprise of 6.09%, on average.

Shares of PPG Industries have gained 30.1% year to date against the industry’s 17.7% decline.

 

 

Driving Factors

Healthy growth prospects are contributing to gain in the company’s shares. It is benefiting from cost management initiatives, pricing actions and strategic acquisitions amid weak industrial demand.

PPG Industries remains focused on improving its cost structure and recovering margins through price increases. The company’s cost-saving programs delivered roughly $20 million in savings in the third quarter. It also expects to achieve another $20 million in cost savings in the fourth quarter.

PPG Industries is also taking steps to expand business through acquisition. The recent acquisition of Dexmet Corporation enables the company to add value to customers by enhancing product offerings as well as expanding R&D capabilities. It will also increase its market reach across the automotive, aerospace and industrial coatings businesses.

For 2019, the company expects adjusted earnings per share (EPS) of $6.17-$6.27. This takes into consideration year-over-year growth projection of 15% at the mid-point in constant currency for the fourth quarter. Moreover, the adjusted EPS growth guidance lies at the low-to-mid end of the earlier forecast of 7-10%, excluding the impact of currency translation.

Over the last 60 days, the Zacks Consensus Estimate for the company’s earnings moved 0.2% north to $6.25 per share for 2019. It suggests 5.6% rise from the year-ago reported figure. The same for 2020 is pinned at $6.77 per share, indicating year-over-year rise of 8.3%.

PPG Industries, Inc. Price and Consensus

 

PPG Industries, Inc. Price and Consensus

PPG Industries, Inc. price-consensus-chart | PPG Industries, Inc. Quote

Stocks to Consider

Some better-ranked stocks in the basic materials space are General Moly, Inc GMO, Franco-Nevada Corporation FNV and Sandstorm Gold Ltd SAND, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

General Moly has an expected earnings growth rate of 12.5% for the current fiscal year. The company’s shares have gained 52.8% in the past year.

Franco-Nevada has a projected earnings growth rate of 48.7% for 2019. The company’s shares have rallied 37.7% in a year.

Sandstorm Gold has an estimated earnings growth rate of 166.7% for the current year. Its shares have moved up 55.5% in the past year.

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