Here's Why You Should Hold PPG Industries Stock for Now

PPG Industries, Inc. PPG has been benefiting from its strong aerospace demand conditions and market-share gains while facing pressure from weak automotive refinish and European architectural markets.

The company’s shares have gained 2.4% over a year compared with the Zacks Chemical - Specialty industry’s 0.9% growth.

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Let’s find out why PPG stock is worth retaining at the moment.

Aerospace Strength, Share Gains and Cost Actions Support Growth

PPG Industries is benefiting from a combination of aerospace strength, market-share gains, pricing actions and cost-reduction initiatives. The company delivered 4% organic sales growth in the second quarter of 2026, marking its sixth consecutive quarter of organic growth, with gains in eight of nine businesses.

Aerospace remained a key growth driver, posting double-digit organic growth and maintaining an order backlog of nearly $300 million. PPG is also investing more than $0.5 billion in additional aerospace capacity across its approximately $2 billion portfolio of qualified products and productivity solutions, positioning the business for sustained growth.

Industrial Coatings also recorded 5% organic sales growth, supported by volume gains across all three businesses, while automotive OEM volumes outpaced global industry production.

Price increases are another factor for earnings growth, with selling prices up 2% in the quarter and covering about 90% of inflation-related costs. Meanwhile, restructuring efforts are expected to generate roughly $175 million once fully implemented. Strong cash generation further supports shareholder returns, with operating cash flow reaching $592 million in the first half of 2026 and net debt declining by $415 million year over year.

Weak End-Market Demand and Inflationary Pressures Weigh on Results

An ailing demand scenario remains a key concern for PPG. Automotive refinish continues to be a significant weakness, with organic sales declining by a double-digit percentage in the second quarter of 2026. While volumes are expected to improve in the second half of the year, management anticipates only modest growth.

European architectural demand also remains soft as consumer sentiment remains mixed by country. Global Architectural Coatings volumes declined 1% in the second quarter. The company therefore remains partly reliant on pricing and cost actions.

In addition, elevated raw material, energy, logistics and packaging costs following the Middle East conflict are creating margin pressure. Cost inflation is expected to remain high in the third quarter, while pricing is not expected to fully offset inflation until the fourth quarter. This timing mismatch could weigh on profitability, particularly in Industrial Coatings.

PPG also faces higher interest expenses, with the company projecting full-year net interest expense at $105-$115 million versus $88 million in 2025. Continued acquisitions, share repurchases and shareholder returns could further limit financial flexibility if operating conditions deteriorate.

PPG Industries, Inc. Price and Consensus

PPG Industries, Inc. price-consensus-chart | PPG Industries, Inc. Quote

PPG’s Zacks Rank & Key Picks

PPG currently carries a Zacks Rank #3 (Hold)

Some better-ranked stocks in the Basic Materials space are Neo Performance Materials Inc. NOPMF, Carpenter Technology Corporation CRS and Avient Corporation AVNT.

While NOPMF currently sports a Zacks Rank #1 (Strong Buy), CRS and AVNT carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for NOPMF’s 2026 earnings is pinned at $1.4 per share, indicating a 185.71% year-over-year increase. NOPMF’sshares have gained 83.2% over the past year.

The Zacks Consensus Estimate for CRS’ fiscal 2027 earnings is pegged at $12.92 per share, indicating a rise of 20.07% year over year. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 8.39%.

The Zacks Consensus Estimate for AVNT’s current-year earnings is pinned at $3.2 per share, indicating a 13.48% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, with an average surprise of 3.4%. AVNT’sshares have gained 20.3% over the past year.

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This article originally published on Zacks Investment Research (zacks.com).

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