PPG Industries, Inc. (PPG) Stock Valuation — DCF Analysis
Chemicals - Specialty · NYSE
Current Price
$119.34
Intrinsic Value
$120.65
+1.1% margin of safety
COMPETITIVE MOAT
↑Brand Recognition & Loyalty
PPG's established brands like Glidden and Dulux foster strong customer loyalty. This recognition translates into repeat purchases and a preference for PPG products in both consumer and professional markets.
↑Scale and Distribution Network
PPG's extensive global manufacturing and distribution network provides significant cost advantages. This allows them to efficiently serve diverse markets and maintain competitive pricing.
↑Technological Innovation
PPG invests in R&D to develop advanced coatings, like electrostatic applications for marine hulls. This focus on innovation creates differentiated products and addresses evolving industry needs.
INVESTMENT RISKS
↓Raw Material Price Volatility
Fluctuations in the cost of key raw materials can impact PPG's profitability. Managing these price swings is crucial for maintaining margins.
↓Intense Competition
The coatings industry is highly competitive, with numerous global and regional players. PPG faces constant pressure to innovate and maintain market share.
↓Economic Sensitivity
Demand for PPG's products is tied to construction and industrial activity. Economic downturns can lead to reduced sales and profitability.
Base case
PPG base case valuation
A base case discounted cash flow model for PPG estimates an intrinsic value of about $120.65 per share, against a current price of $119.34. The model assumes 5.2% annual free cash flow growth, a 10.0% discount rate, and a 22x exit multiple.
Intrinsic Value
$120.65
Margin of safety
+1.1%
Expected annual return
+0.2%
Base case assumptions: 5.2% annual growth, 10.0% discount rate, 22x exit multiple, 5 year projection. Data as of 2026-06-12.
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)
$72.07
FCF/Share (TTM)
$5.49
ROIC (TTM)
8.8%
ROE (TTM)
31.8%
P/FCF
21.7x
EV/EBITDA
11.5x
FCF Yield
4.61%
Debt/Equity
0.95x
Based on trailing twelve-month data, PPG shows a free cash flow per share of $5.49 and a ROIC of 8.8%, key inputs for stock valuation using the DCF method. The P/FCF ratio of 21.7x and FCF yield of 4.61% are important context metrics when evaluating PPG's stock valuation relative to peers.
Frequently Asked Questions
What is the intrinsic value of PPG?
PPG Industries, Inc. currently generates $5.49 in free cash flow per share. At the current price of $119.34, 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 21.7x with a free cash flow yield of 4.61%. 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 ($5.49) 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 0.95x, 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 8.8% shows moderate capital returns.
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 0.95x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 11.5x, 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 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.