PPG
PPG Industries, Inc.
$115.31
Stable Earnings Power
65%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Overvalued
Trading 3.5% above fair value
You pay
$115.31
Bear
$89.12
Fair
$111.40
Bull
$133.68
Bear
$89.12
-22.7%
$6.92 × 12x P/E
Fair
$111.40
-3.4%
$6.92 × 15x P/E
Bull
$133.68
+15.9%
$6.92 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
16.7x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $129.14 from 38 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $111.40 per share.
Warnings
Dividend-based valuation: $69.71 (below our primary estimate by 33%). Large gaps may signal the dividend doesn't reflect full earning power.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples