PPG Industries, Inc. (PPG) Intrinsic Value & DCF Valuation
Chemicals - Specialty · NYSE
Current Price
$111.07
Intrinsic Value
$104.33
-6.5% margin of safety
What Is PPG Industries, Inc.'s Intrinsic Value?
As of 2026-07-30, the base-case DCF model estimates the intrinsic value of PPG Industries, Inc. (PPG) at $104.33 per share, compared with a market price of $111.07, a margin of safety of -6.5%. The base case assumes 2.8% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $83.13 to $128.87. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is PPG Industries, Inc. (PPG) Undervalued?
At $111.07, PPG trades about 6.5% above the base-case intrinsic value estimate, a modest premium. By this model the price sits within a normal band, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Global Manufacturing Scale and Distribution
PPG's extensive global manufacturing footprint and established distribution network create significant barriers to entry for smaller competitors. This scale allows for cost efficiencies and broad market reach.
↑Brand Reputation and Customer Loyalty
Decades of delivering reliable coatings and materials have built strong brand recognition and customer loyalty. This trust translates into repeat business and a preference for PPG products.
↑Proprietary Technology and R&D Investment
Continuous investment in research and development yields specialized, high-performance coatings. These patented technologies offer unique solutions that are difficult for competitors to replicate.
INVESTMENT RISKS
↓Economic Downturns Affecting End Markets
PPG's performance is tied to cyclical industries like automotive and construction. Significant economic slowdowns can reduce demand for its products.
↓Regulatory and Environmental Compliance Costs
Increasingly stringent environmental regulations globally require ongoing investment in compliance and product reformulation. Non-compliance can lead to fines and reputational damage.
↓Technological Disruption in Coating Applications
Emerging technologies in material science or application methods could potentially disrupt traditional coating markets. PPG must adapt to these shifts to maintain its competitive edge.
Base case
PPG base case valuation
Intrinsic Value
$104.33
Margin of safety
-6.5%
Expected annual return
-1.2%
Base case assumptions: 2.8% annual growth, 10.0% discount rate, 17x exit multiple, 5 year projection. Data as of 2026-07-30.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the PPG valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for PPG Industries, Inc. respond.
Open DCF Calculator for PPGCompany Overview
PPG Industries, Inc. operates globally as a manufacturer and distributor of paints, protective coatings, and various specialty materials. Its Performance Coatings division offers an extensive range of products, including paints, solvents, adhesives, sealants, and software, designed for the repair and refurbishment of automotive and commercial vehicles, light industrial applications, and signage. This segment also supplies advanced coatings, sealants, transparent components (such as transparent armor), engineered materials, and chemical management services to the commercial, military, and general aviation aerospace sectors. Furthermore, it develops protective coatings and finishes for metals and large-scale structures, serving metal fabricators, heavy-duty maintenance contractors, and manufacturers of ships, bridges, and rail cars. Architectural offerings include paints, wood stains, adhesives, and sundry items for both professional contractors and individual consumers for the decoration and upkeep of residential and commercial buildings. Additionally, it provides paints, thermoplastics, and other advanced solutions for pavement marking. The Industrial Coatings segment delivers specialized coatings, adhesives, sealants, and metal pretreatment solutions. These are applied across a diverse array of manufactured goods, including appliances, agricultural and construction machinery, consumer electronics, automotive components, building materials, kitchenware, and transportation vehicles, often supported by on-site application services. This segment also produces coatings specifically for packaging, such as metal cans, closures, plastic tubes, and promotional or specialty containers. Beyond coatings, PPG innovates with unique materials like amorphous precipitated silica for tires and battery separators; TESLIN substrates utilized in labels, e-passports, driver's licenses, and identification cards; as well as organic light-emitting diode (OLED) materials, display and lighting lens components, optical lenses, color-changing technologies, and photochromic dyes. Founded in 1883, PPG Industries, Inc. is headquartered in Pittsburgh, Pennsylvania.
Financial Metrics — PPG Stock Valuation Data
Revenue/Share (TTM)
$73.50
FCF/Share (TTM)
$6.41
ROIC (TTM)
41.2%
ROE (TTM)
68.4%
P/FCF
17.3x
EV/EBITDA
12.4x
FCF Yield
5.79%
Debt/Equity
n/m
On a trailing twelve-month basis, PPG generates free cash flow per share of $6.41 alongside a ROIC of 41.2%, both central inputs for a DCF valuation. Its P/FCF ratio of 17.3x and FCF yield of 5.79% then frame how PPG is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of PPG?
PPG Industries, Inc. currently generates $6.41 in free cash flow per share. At the current price of $111.07, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is PPG undervalued?
PPG trades at a P/FCF ratio of 17.3x with a free cash flow yield of 5.79%. This P/FCF is in a moderate range. However, whether PPG is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value PPG stock using DCF?
To perform a DCF valuation on PPG Industries, Inc.: (1) Start with the trailing free cash flow per share ($6.41) 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 — with a debt-to-equity of -2.22x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to PPG?
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 company will produce over the next 5-10 years, shaped by Chemicals - Specialty trends, then discounting those amounts to today's dollars. PPG's ROIC of 41.2% reflects how efficiently the company converts invested capital into profit.
How does WACC affect PPG stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For PPG, with a debt-to-equity ratio of -2.22x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 12.4x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See PPG PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Basic Materials valuationsDCF and P/E value PPG with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-07-30. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.