ppg工业公司：终端市场风险可能延续至2026年上半年

---17.4 2025E2026E15.716.32.83.07.888.5916.016.2 2027E16.83.29.3816.5 Laurence Alexander * | Equity Analyst(212) 284-2553 | lalexander@jefferies.comDaniel Rizzo * | Equity Analyst(212) 336-6284 | drizzo@jefferies.comKevin Estok * | Equity Associate(212) 778-8516 | kestok@jefferies.comCarol Jiang * | Equity Associate+1 (212) 284-1714 | cjiang@jefferies.comXianrao Zhu * | Equity Associate+1 (212) 778-8742 | xzhu@jefferies.com The Long View: PPG Industries, Inc.Investment Thesis / Where We Differ•Our investment case for PPG hinges on the outlook for industrial productionand for auto OEM and housing.•We believe demand risks for 2025 and 2026 remain a significant threat tothe company's relative multiple, particularly if auto production rates sloweven as raw material pressure returns faster than we expect in our basecase.Base Case,$110, -0%•Conservative volume growth assumptions.•Price hikes support continued margin recovery.•~$200m in productivity.•$3.5bn in cash flow deployment.•2026E EPS: $8.25; Target Multiple: 13.3x; 9.5xEBITDA; PT: $110Sustainability MattersTop Material Issue(s): 1)Product Design & Lifecycle Management.PPG can take share by usingmore sustainable ingredients.2) Supply Chain Management.PPG can improve margins by managingvolatile supply chains. 3)Materials Sourcing & Efficiency.PPG can take share and protect margins bydriving customer efficiency.3) Water & Wastewater Managementis a critical secular driver for paintindustry innovation, particularly in industrial applications, and consequently a key factor creating sharegain opportunities.Company Targets: 1)25% reduction in waste disposal intensity by 2025 from a 2017 baseline.2)Reducewater intensity by 20% by 2025 from a 2017 baseline.3)Zero landfill status from process waste at 35%of PPG manufacturing and R&D locations by 2025.Management Questions: 1)What is the operating margin spread between the sustainable products andconventional chemistries?2)How much does enabling the shift to more energy-efficient and sustainablesolutions expand your TAM, particularly in automotive applications?ESG Sector Deep Dive: ChemicalsPlease see important disclosure information on pages 6 - 11 of this report.This report is intended for Jefferies clients only. Unauthorized distribution is prohibited. Upside Scenario,$220, +99%•Volume CAGR 200bps above our forecast.•Gains 100bps of share in auto and industrial.•Valuation driven by relative EPS CAGR vs. S&P500 & credit given for FCF.•Peak EPS $11.00; Peak multiple: 20x; PT: $220. Downside Scenario,$88, -20%•Global recession lowers volumes 5%.•Falling volume and rising TiO2 and resin pricesresult in prices lagging raw materials by 1%.•Auto and architectural demand falls.•Shares trade in line with the average of priortrough multiples.•$1bn of incremental buybacks.•Trough EPS $5.50; Trough multiple 16x; PT: $88.Catalysts•Deploying excess cash.•Acquisitions reinforce consolidation thesis.•Share gains in industrial coatings.•Decline in input costs. 2 Tariffs Impacts:As of late April, there were signs of a deceleration in auto OEM purchasing relatedto tariffs, likely reflecting incremental downside to our original estimates if trends continue in May.Refinish appears relatively more insulated than auto OEMs from tariff risks given a "glocal" strategy.On the downside, PPG estimates Mexico project delays related to auto-tariffs could represent a ~1%company sales impact (~$0.15/share), reduced Chinese exports to the US a ~1% sales impact, and2% in potentially lower-than-expected auto production a ~1% sales impact. Raw materials are likely a1-3% cost headwind in 2025 (or $0.15-$0.50/share). If tariffs move higher-for-longer, which remainsa key risk, we expect some auto OEM supply chains will re-route with intensified order choppiness.If tariffs begin substantially weighing on PPG's auto OEM customers, the company can reduce paintoutput and staffing before it idles entire auto OEM paint lines. Potential offsets include the rawmaterial tailwind implied by lower oil prices, higher Chinese stimulus, improving EU demand, potentialFX tailwinds from a weaker USD, higher infrastructure spend, and greater localization of productionand supply chains.Outperforming Weak Auto End-Markets:PPG likely outperforms auto OEM markets more sharplystarting in 3Q25 on already won share gains and regional mix (outperformance in Asia). PPGexpects to broadly outperform refinish coatings end-markets on share gains, product differentiation,and expanding into other adjacencies. Relative to peers, PPG employs the most digital tools, likeLINQ subscriptions and Moonwalk installations, which raise store-level productivity by ~15% whileincreasing customer connectivity. The company's distribution from warehouses to collision centersis also a relative area of strength, and products, like Clearcoat, dry faster at lower temperatures, andrequire less energy.FCF & Capital Structure:1/ We estimate $1.3bn in post-dividend FCF in 2025, and $3.7bncumulatively th