Here's Why You Should Retain PPG Industries Stock in Your Portfolio

PPG Industries, Inc. PPG is gaining from pricing actions, cost discipline and acquisitions amid headwinds from demand weakness, especially in Europe.The company’s shares are down 15.8% over the past year compared with the Zacks Chemicals Specialty industry’s 0.8% rise.Image Source: Zacks Investment ResearchLet’s find out why PPG stock is worth retaining at the moment.Cost & Pricing Actions, Acquisitions Aid PPGPPG Industries is implementing a cost-cutting and restructuring strategy and optimizing its working capital requirements. The cost savings generated by these restructuring initiatives will act as a tailwind for the company. It has undertaken extensive restructuring efforts to reduce its cost structure, primarily focusing on regions and end markets with weak business conditions. The company realized an additional $15 million in structural cost savings in first-quarter 2025. PPG also announced a comprehensive cost reduction program, which is expected to deliver annualized pre-tax savings of around $175 million once fully implemented. The program includes the reduction of structural costs, mainly in Europe and in certain other global businesses. These efforts underscore PPG Industries' commitment to enhancing operational efficiency and ensuring sustained financial strength. PPG Industries is also raising selling prices across its business segments to offset the impact of cost inflation and drive profitability. The company is also undertaking measures to grow business inorganically through value-creating acquisitions. Contributions from the acquisitions are expected to be reflected in its performance. Acquisitions, including Tikkurila, Worwag, Cetelon and Arsonsisi’s powder coatings manufacturing business, are likely to contribute to its top line.PPG Industries remains committed to boosting shareholder returns with cash deployment. It has an impressive record of returning cash to shareholders through dividends and share buybacks. In 2024, the company returned $1.4 billion to shareholders through dividends and share repurchases. It paid dividends worth $620 million in 2024. PPG also bought back $750 million of shares in 2024. The company also repurchased shares worth roughly $400 million in the first quarter of 2025, leaving $2.4 billion remaining on its current buyback authorization. PPG's robust financial performance is reflected in the substantial operating cash flow generation, which reached around $1.4 billion in 2024.Weaker Industrial Demand Weighs On PPG StockPPG is being challenged by soft global industrial production, which is impacting demand in the Industrial Coatings segment. Lower automotive OEM build rates and softer industrial production in the United States and Europe are hurting volumes and sales in this segment. Weak consumer confidence is negatively impacting demand in Europe. Automotive industry build rates declined in Europe and the United States in the first quarter due to lower demand and are expected to be lower in the second quarter. Despite a slight improvement, global industrial production is expected to remain subdued in the second quarter with continued weakness in the United States and Europe.  The company sees a low-to-mid single-digit percentage decline in industrial coatings segment organic sales in the second quarter. Overall organic growth is expected to be limited by lower automotive OEM build rates and still subdued industrial production. Industrial coatings demand is expected to remain under pressure in the quarter.PPG Industries, Inc. Price and Consensus PPG Industries, Inc. price-consensus-chart | PPG Industries, Inc. QuotePPG’s Zacks Rank & Other Key PicksPPG currently carries a Zacks Rank #3 (Hold).Better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, Newmont Corporation NEM and Hawkins, Inc. HWKN. While CRS and NEM sport a Zacks Rank #1 (Strong Buy), HWKN carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.The Zacks Consensus Estimate for Carpenter Technology for the current fiscal year stands at $7.27, reflecting a 43.4% year-over-year increase. CRS beat the consensus estimate in each of the trailing four quarters, with the average earnings surprise being 11.1%. CRS’ shares have shot up roughly 115% in a year. The Zacks Consensus Estimate for Newmont’s current-year earnings is pegged at $4.18, indicating an 20.1% year-over-year rise. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed it once, with an average surprise of 32.4%. NEM’s shares have gained around 26% in the past year.The consensus estimate for Hawkins’ current fiscal-year earnings stands at $4.37, suggesting an 8.4% year-over-year increase. HWKN beat the consensus estimate in two of the trailing four quarters, while missing twice. In this time frame, it has delivered an earnings surprise of roughly 8.2%, on average. The company's shares have rallied roughly 51% in the past year.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PPG Industries, Inc. (PPG): Free Stock Analysis Report Newmont Corporation (NEM): Free Stock Analysis Report Carpenter Technology Corporation (CRS): Free Stock Analysis Report Hawkins, Inc. (HWKN): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks