- Company name
- PPG Industries
- Sector
- Paints & coatings
- About
- PPG is one of the largest makers of paints and coatings in the world, based in Pittsburgh. It has three segments. Global Architectural Coatings sells paint for homes and buildings, mainly in Europe, Latin America and Asia. Performance Coatings makes coatings for aircraft, car repair shops (automotive refinish), ships, industrial structures and roads. Industrial Coatings makes coatings for new cars, appliances and other industrial products, and for metal packaging such as cans. Net sales were $4.35 billion in Q3 2026.
- Thesis
- The market prices PPG for weak volumes in some end markets and for higher costs. In Q2 2026, automotive refinish volumes fell by a double-digit percentage, and prices covered only about 90% of cost inflation. Q3 2026 was better. Organic sales grew 5%, prices fully offset cost inflation one quarter earlier than PPG expected, automotive refinish organic sales grew by a mid single-digit percentage, and adjusted EPS grew 6%. PPG raised the midpoint of its 2026 adjusted EPS guidance to $7.90 to $8.10. But the Industrial Coatings EBITDA margin fell 260 basis points, because its index-based prices follow costs with a delay, and Global Architectural Coatings volumes fell 2%. For the gap to close, PPG must keep prices ahead of cost inflation, and Industrial Coatings margins must recover as index prices catch up. Automotive refinish must keep its recovery, and aerospace and packaging must keep their growth. PPG must also reach its 2026 guidance and guide higher adjusted EPS for 2027. The Q4 2026 report and the 2027 guidance, expected in late January 2027, are the next test. If these checks pass, the gap can close over the next two to four quarters. The main reason it may not close is a longer period of weak industrial demand and high raw material costs, which would hold margins down.
- Risks
- Costs for raw materials, energy and logistics rose in 2026. Prices fully offset this inflation in Q3 2026, but Industrial Coatings uses index-based prices that follow costs with a delay, and its EBITDA margin fell 260 basis points in Q3 2026. If inflation rises again, margins fall.
Automotive refinish volumes fell in Q2 2026 and recovered in Q3 2026, when organic sales grew by a mid single-digit percentage. If insurance claims and repair work weaken again, the margin of Performance Coatings falls.
Weak demand in Europe and new tariffs can lower volumes in architectural and industrial coatings.
PPG has legacy asbestos and environmental lawsuits. New claims or higher settlement costs can lower cash flow.
- Balance sheet
- Cash: $1.6B
Debt: $6.8B
Net debt: $5.2B
Interest cover: 9.6×
Debt due within 12 months: $686M
PPG funds itself with bonds in US dollars, euros and Swiss francs and with a euro term loan. At September 30, 2026, total debt was $6.84 billion: long-term debt of $6.16 billion and short-term debt and current maturities of $686 million. Cash and short-term investments were $1.64 billion, and net debt was $5.2 billion, about $200 million lower than a year earlier. Interest cover is income before income taxes plus interest expense, divided by interest expense, for the first nine months of 2026. Cash from operating activities was $1,158 million in the first nine months of 2026, $104 million more than a year earlier, and capital expenditures were $464 million. PPG bought back about $320 million of shares and paid $482 million of dividends in the same period. The Q3 2026 10-Q was not filed on October 28, 2026, so these figures come from the earnings release. The 10-Q for June 30, 2026 says that the credit agreements limit total debt to 60% of total capitalization. In Q2 2026, PPG issued CHF 320 million of bonds due in 2030 and 2034 at 1.22% and 1.66%.
As of Sep 30, 2026.
- Checkpoints
- Oct 27, 2026: Q3 2026 earnings: pricing and refinish. Passed. Watch: Organic sales growth in the low to mid single digits with prices that cover cost inflation passes; a cut to the $7.70 to $8.10 guidance fails. Outcome: Organic sales grew 5%, prices fully offset cost inflation, and PPG raised the midpoint of its adjusted EPS guidance to $7.90 to $8.10.
Jan 27, 2027 (estimate): Q4 2026 results and the 2027 guidance. Pending. Watch: Prices that stay ahead of cost inflation in Q4, better Industrial Coatings margins and guidance for higher adjusted EPS in 2027 pass; lower margins or a weak 2027 outlook fail.
- Recent events
- Oct 27, 2026: PPG reported Q3 2026 results. Net sales were $4.35 billion, up 7%, and organic sales grew 5%. EPS was $2.12, and adjusted EPS was $2.25, up 6%. Selling prices rose 3% and fully offset cost inflation in the quarter. Automotive refinish organic sales grew by a mid single-digit percentage, and aerospace organic sales grew by a double-digit percentage. The Industrial Coatings EBITDA margin fell 260 basis points because of cost inflation. PPG raised the midpoint of its 2026 adjusted EPS guidance and narrowed it to $7.90 to $8.10, from $7.70 to $8.10. It bought back about $150 million of shares in the quarter.
Sep 28, 2026: PPG said that it will report Q3 2026 results after the market closes on October 27, 2026, with a conference call on October 28.
Jul 28, 2026: PPG reported Q2 2026 results. Net sales were $4.5 billion, up 7%, and organic sales grew 4%, with growth in eight of nine businesses. EPS was $1.96, and adjusted EPS was $2.23, about flat. PPG kept its 2026 adjusted EPS guidance of $7.70 to $8.10. It said that prices covered about 90% of cost inflation in Q2 and that it expects to cover 100% by Q4 2026.
Jul 28, 2026: In Q2 2026, the Performance Coatings EBITDA margin fell 300 basis points because of lower automotive refinish volumes, while aerospace sales grew by a double-digit percentage with a backlog near $300 million. Industrial Coatings volumes grew 5% from share gains. For Q3 2026, PPG expects organic sales growth in the low to mid single digits.