快速解读：PPG在战略决策会议上——管理层专注于实现盈利超预期和销量增长

F23AF24EF25E7.688.419.07FinancialsF23AF24EF25ECAGRReported EPS7.688.419.07--Valuation MetricsF23AF24EAdjusted P/E (x)14.413.2Reported P/E (x)14.413.2Close Date30 May 2025PPG Close Price (USD)Price Target (USD)Upside/(Downside)52-Week Range137.24/90.24SPX5,911.69FYEDiv YieldMarket Cap (USD) (M)EV (USD) (M)PerformanceYTD1M6MAbsolute (%)(7.2)1.8(10.9)SPX (%)0.56.2(2.0)Relative (%)(7.8)(4.4)(8.9)Source: Bloomberg, Bernstein estimates and analysis.Price Performance, 1YR$150$140$130$120$110$100$9006/2409/2411/2402/2505/255000550060006500PPGSPXwww.bernsteinresearch.com Pricing beyond raw materials.PPG are seeking to sustainably price above raw material inflation for the long term. 30% ofthe industrial coatings business is indexed, which currently represents a drag, but in the rest of the business PPG are seekingto move the conversation with customers to focus on value. For example, vehicle refinish can be a source of secular pricegrowth, given PPG’s technology can help body shops reduce key-to-key time, thereby making the body shops more likely to wininsurance business.Capital allocation discipline.PPG are not looking to deleverage further after their recent asset disposals, but are keen todemonstrate capital discipline. Organic growth is the “tip of the spear”, e.g. aerospace receiving capital to expand production.At current share price levels, management sees buybacks as attractive. M&A is still possible, but selectively; for example BASF’sSuvinil was considered a compatible asset but too expensive. For the broader BASF coatings assets, PPG see the whole asdifficult given anti-trust and potential dissynergies, but could be interested if refinish or Chemetall are sold separately.EUROPEAN CHEMICALS2 INVESTMENT IMPLICATIONSWe rate PPG Outperform.BERNSTEIN TICKER TABLETickerRatingPPGOUSDSPXO - Outperform, M - Market-Perform, U - Underperform, NR - Not Rated, CS - Coverage SuspendedSource: Bloomberg, Bernstein estimates and analysis.EUROPEAN CHEMICALS I. REQUIRED DISCLOSURESReferences to "Bernstein" or the “Firm” in these disclosures relate to the following entities: Bernstein Institutional Services LLC(April 1, 2024 onwards), Sanford C. Bernstein & Co., LLC (pre April 1, 2024), Bernstein Autonomous LLP, BSG France S.A. (April 1,2024 onwards), Sanford C. Bernstein (Hong Kong) Limited盛博香港有限公司,C. Bernstein (India) Private Limited (SEBI registration no. INH000006378), Sanford C. Bernstein (Singapore) Private Limited andSanford C. Bernstein Japan KKOn April 1, 2024, Société Générale (SG) and AllianceBernstein, L.P. (AB) completed a transaction that created a new joint venturein which their respective cash equities and research businesses operate in a new business combination. Although their respectiveownership percentages in the joint venture differ between North America and the rest of the world, the creation, production andpublication of research is handled collaboratively on a global basis across the two research brands, “Bernstein” and “Autonomous”.Unless specifically noted otherwise, for purposes of these disclosures, references to Bernstein’s “affiliates” relate to both SG andAB and their respective affiliates.VALUATION METHODOLOGYPPG IndustriesWe value PPG based on c.20x 2024e P/E (pre-acquisition goodwill and >13x 2024e EV/EBITDA) as a pure coatings major whichgives us our PT of $166. This reflects what we see as the attractions of the coatings industry with typically low volatility, resilientprofitability and strong cash flow. This is a premium compared with PPG's 5-year historical average prospective P/E of nearer 20xand prospective EV/EBITDA of >12x. This reflects our view of a still depressed performance in 2024 given marco headwinds, butbeyond that the coating majors will likely emerge relatively stronger with the potential for stronger sustainable profitability andcash flow on an inflated sales base. This also reflects PPG's strong long-term financial track record, its strong record on bolt-onM&A activity and attractive ESG profile.RISKSPPG IndustriesDownside: 1. Underlying demand falls sharply in 2024, with notable concerns over US construction related exposure and haltsthe expected margin recovery as raw material costs fall (potential impact on PT >$10). 2. Input costs do not fall as expected in2024 despite the easing of supply disruptions weighing on performance (potential impact on PT c.$10. 3. Selling prices comeunder increased pressure if end markets remain weak (potential PT impact <$5).RATINGS DEFINITIONS, BENCHMARKS AND DISTRIBUTIONBernstein brandThe Bernstein brand rates stocks based on forecasts of relative performance for the next 12 months versus the S&P 500 forstocks listed on the U.S. and Canadian exchanges, versus the Bloomberg Europe Developed Markets Large and Mid Cap PriceReturn Index (EDM) for stocks listed on the European exchanges and emerging markets exchanges outside of the Asia Pacificregion, versus the Bloomberg Japan Large and Mid Cap Price Return Index USD (JP) for stocks list