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PPG Rides on Cost Reduction, Pricing Actions and Acquisitions
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PPG Industries, Inc. (PPG - Free Report) is well-positioned to capitalize on cost-saving measures, pricing strategies and strategic acquisitions, which will drive its growth and profitability.
The stock has gained 14.7% in the past year compared with the industry’s rise of 16.2% in the same period.
Image Source: Zacks Investment Research
What’s Driving the Growth?
PPG has a comprehensive cost-cutting and restructuring strategy and it optimizes its working capital requirements. These restructuring efforts are generating substantial cost savings and acting as a catalyst for growth.
PPG Industries has undertaken extensive restructuring measures to trim its cost structure, primarily focusing on regions and end-use sectors facing challenging business conditions. The company is executing significant global restructuring initiatives, resulting in approximately $15 million in additional cost reductions through restructuring programs and acquisition synergies during the second quarter of 2023.
Furthermore, PPG Industries is strategically expanding through strategic acquisitions. Acquisitions such as Tikkurila, Worwag and Cetelon are expected to significantly contribute to the company's revenues in 2023, strengthening its market presence and diversifying its product offerings.
To combat the impact of rising raw material and other cost inflation, PPG Industries has successfully implemented price increases across its various business segments, bolstering profit margins. The company has made significant strides in enhancing consolidated segment margins, which exceeded 16% in the second quarter, marking a remarkable 330 basis points increase year over year. The Performance Coatings segment, in particular, achieved impressive margin performance, reaching its highest levels since 2016.
The earnings estimate for Carpenter Technology’s current year is pegged at $3.36, indicating a year-over-year growth of 194%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 97.1% in the past year.
The consensus estimate for Hawkins’ current-year earnings is pegged at $3.40, indicating year-over-year growth of 18.9%. HWKN beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have rallied 66% in the past year.
The consensus estimate for Livent’s current-year earnings is pegged at $2.12, indicating year-over-year growth of 51.4%. In the past 60 days, LTHM’s current-year earnings estimate has been revised upward by 3.4%. The company beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 19%.
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PPG Rides on Cost Reduction, Pricing Actions and Acquisitions
PPG Industries, Inc. (PPG - Free Report) is well-positioned to capitalize on cost-saving measures, pricing strategies and strategic acquisitions, which will drive its growth and profitability.
The stock has gained 14.7% in the past year compared with the industry’s rise of 16.2% in the same period.
Image Source: Zacks Investment Research
What’s Driving the Growth?
PPG has a comprehensive cost-cutting and restructuring strategy and it optimizes its working capital requirements. These restructuring efforts are generating substantial cost savings and acting as a catalyst for growth.
PPG Industries has undertaken extensive restructuring measures to trim its cost structure, primarily focusing on regions and end-use sectors facing challenging business conditions. The company is executing significant global restructuring initiatives, resulting in approximately $15 million in additional cost reductions through restructuring programs and acquisition synergies during the second quarter of 2023.
Furthermore, PPG Industries is strategically expanding through strategic acquisitions. Acquisitions such as Tikkurila, Worwag and Cetelon are expected to significantly contribute to the company's revenues in 2023, strengthening its market presence and diversifying its product offerings.
To combat the impact of rising raw material and other cost inflation, PPG Industries has successfully implemented price increases across its various business segments, bolstering profit margins. The company has made significant strides in enhancing consolidated segment margins, which exceeded 16% in the second quarter, marking a remarkable 330 basis points increase year over year. The Performance Coatings segment, in particular, achieved impressive margin performance, reaching its highest levels since 2016.
PPG Industries, Inc. Price and Consensus
PPG Industries, Inc. price-consensus-chart | PPG Industries, Inc. Quote
Other Key Picks
PPG currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) and Hawkins, Inc. (HWKN - Free Report) , both sporting a Zacks Rank #1 (Strong Buy), and Livent Corporation , carrying a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The earnings estimate for Carpenter Technology’s current year is pegged at $3.36, indicating a year-over-year growth of 194%. CRS beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 10%. The company’s shares have rallied 97.1% in the past year.
The consensus estimate for Hawkins’ current-year earnings is pegged at $3.40, indicating year-over-year growth of 18.9%. HWKN beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 25.6%. The company’s shares have rallied 66% in the past year.
The consensus estimate for Livent’s current-year earnings is pegged at $2.12, indicating year-over-year growth of 51.4%. In the past 60 days, LTHM’s current-year earnings estimate has been revised upward by 3.4%. The company beat the Zacks Consensus Estimate in all the last four quarters, with the average earnings surprise being 19%.