The analyst firm raised its 2014 EPS estimates for the chemical company to $9.61 a share from $9.51 a share. Jefferies raised its EPS estimates for PPG Industries to $11.37 a share for 2015 and $12.76 a share for 2016, up from $11.11 a share and $12.49 a share, respectively.
"We expect PPG's end-markets to remain consistent into year-end, with strength in China, solid growth in North America and Mexico, sluggish trends in Europe (and France particularly weak), and persistent erosion in South America," Jefferies analysts wrote. "Underlying trends probably remain solid in aerospace (esp. military) and auto OEM (4%-5% growth in 2015 appears plausible)."
Separately, TheStreet Ratings team rates PPG INDUSTRIES INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:
"We rate PPG INDUSTRIES INC (PPG) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its solid stock price performance, impressive record of earnings per share growth, increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. We feel these strengths outweigh the fact that the company shows weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
- PPG INDUSTRIES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, PPG INDUSTRIES INC increased its bottom line by earning $6.67 versus $4.69 in the prior year. This year, the market expects an improvement in earnings ($9.61 versus $6.67).
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Chemicals industry. The net income increased by 64.2% when compared to the same quarter one year prior, rising from $226.00 million to $371.00 million.
- Despite its growing revenue, the company underperformed as compared with the industry average of 9.4%. Since the same quarter one year prior, revenues slightly increased by 4.3%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The current debt-to-equity ratio, 0.55, is low and is below the industry average, implying that there has been successful management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.23, which illustrates the ability to avoid short-term cash problems.
- You can view the full analysis from the report here: PPG Ratings Report