RBC Capital analyst Arun Viswanathan reiterated a Sector Perform rating and $119.00 price target on PPG Industries (NYSE: PPG)

The analyst comments "Broadest product portfolio drives differentiated customer value. PPG highlighted that one of its main competitive advantages in its Aerospace business is its comprehensive product portfolio, where PPG is a leader in all market segments (Sealants & Adhesives, Transparencies, Engineered Materials, and Coatings) . Conversely, most competitors focus only in one vertical, such as 3M, Chemetall, and Henkel in Sealants & Adhesives; St.- Gobain and GKN in Transparencies; AKZO and SHW in Coatings, and several small players in Engineered Materials. This has made PPG a trusted partner, which can result in quicker qualifications, and has allowed PPG to increase share of wallet with large OEMs such as Embraer (we toured its biz jet production facility in Melbourne, FL on this trip) and outgrow the market, which is estimated to grow at a +7% 2025-2028 CAGR ($5B TAM). PPG Aerospace still an Innovation-leader. In addition to its broad product portfolio, PPG has maintained its technology and innovation leadership position. Representative new products include PRC Seal Caps, ARE 3D Printed Sealants, its AEROCRON Electrocoat Primer (the only E-coat certified for aerospace), anti-ice and fog and lightning strike protective Transparencies, and customized Packaging solutions. Most of these unique solutions offer customers savings in cost (90% cost reduction from Seal Caps), time (Embraer has reduced production time from 45 to 27 days, or a ~40% reduction), and helps PPG innovate in its other businesses as well (Aero and Auto OEM remain PPG's R&D engines). +Msd-hsd% Aerospace CAGR thru 2028 but soft macros likely to continue to weigh on other businesses. We see minimal risk to PPG's +msd-hsd % Aero CAGR through 2028 given its robust $315M backlog (60/40 after- market/OEM). Importantly, PPG noted a +7% Aero industry 2025-28 CAGR, supported by +12% Commercial OEM Builds CAGR, +3% Business Jet, and +6% Military OEM . That said, we see persistent macro headwinds for ~60%+ of PPG sales, as EMEA Arch is unlikely to improve until 2028-29 (7 year Repaint cycle from 2021-22), Refinish and Auto OEM are seeing affordability issues, and Industrial (ex-P&M, Packaging) needs stronger Global IP. As a result, we maintain our ests, $119 PT and SP rating."

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Shares of PPG Industries closed at $116.36 yesterday.