Chemicals - Specialty · NYSE
Current Price
$104.69
Intrinsic Value
Use the calculator below to estimate
Run a full DCF analysis on PPG Industries, Inc. with auto-filled fundamentals, adjustable assumptions, and sensitivity heatmap.
PPG Industries, Inc. manufactures and distributes paints, coatings, and specialty materials worldwide. The company's Performance Coatings segment offers coatings, solvents, adhesives, sealants, sundries, and software for automotive and commercial transport/fleet repair and refurbishing, light industrial coatings, and specialty coatings for signs; and coatings, sealants, transparencies, transparent armor, adhesives, engineered materials, and packaging and chemical management services for commercial, military, regional jet, and general aviation aircraft. It also provides coatings and finishes for the protection of metals and structures, such as metal fabricators, heavy duty maintenance contractors, and manufacturers of ships, bridges, and rail cars; paints, wood stains, adhesives, and purchased sundries for painting and maintenance contractors, and consumers for decoration and maintenance of residential and commercial building structures; and paints, thermoplastics, pavement marking products, and other technologies for pavement marking. The company's Industrial Coatings segment offers coatings, adhesives and sealants, and metal pretreatments, as well as services and coatings applications for appliances, agricultural and construction equipment, consumer electronics, automotive parts and accessories, building products, kitchenware, and transportation vehicles and other finished products; and on-site coatings services. It also provides coatings for metal cans, closures, plastic tubes, and promotional and specialty packaging; amorphous precipitated silica for tire, battery separator, and other end-uses; TESLIN substrates for labels, e-passports, drivers' licenses, breathable membranes, and loyalty and identification cards; and organic light emitting diode materials, displays and lighting lens materials, optical lenses, color-change products, and photochromic dyes. The company was incorporated in 1883 and is headquartered in Pittsburgh, Pennsylvania.
ROIC (TTM)
41.0%
ROE (TTM)
75.1%
FCF Yield
6.77%
Based on trailing twelve-month data, PPG shows a free cash flow per share of N/A and a ROIC of 41.0%, key inputs for stock valuation using the DCF method. The P/FCF ratio of N/A and FCF yield of 6.77% are important context metrics when evaluating PPG's stock valuation relative to peers.
The intrinsic value of PPG depends on assumptions about future growth rate, discount rate (WACC), and terminal value. A DCF model discounts projected free cash flows back to present value — small changes in WACC can shift the estimate by 20% or more, which is why sensitivity analysis is essential.
Whether PPG is undervalued depends on comparing the DCF-derived intrinsic value to the current market price of $104.69. A positive margin of safety (intrinsic value above market price) suggests potential undervaluation, but the degree of confidence depends on the reliability of your growth and discount rate assumptions.
To perform a DCF valuation on PPG Industries, Inc.: (1) Start with the trailing free cash flow per share as the base, (2) project future FCF growth over 5-10 years based on Chemicals - Specialty industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting PPG's risk profile, and (4) add a terminal value for cash flows beyond the projection period.
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For PPG Industries, Inc., this means projecting how much free cash flow the Chemicals - Specialty will produce over the next 5-10 years, then discounting those amounts to today's dollars. PPG's ROIC of 41.0% indicates strong capital efficiency, which supports higher growth assumptions in the DCF model.
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For PPG, the capital structure and equity risk premium determine WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%.
