Here's Why You Should Retain PPG Industries Stock in Your Portfolio

Core Viewpoint - PPG Industries is experiencing challenges due to weak demand, particularly in Europe, but is benefiting from pricing actions, improved manufacturing efficiencies, cost discipline, and acquisitions [1][9]. Group 1: Financial Performance and Strategies - The company has implemented a cost-cutting and restructuring strategy, optimizing working capital, which is expected to generate significant cost savings [4]. - PPG realized an additional $15 million in structural cost savings in Q4 2024 and anticipates around$45 million in restructuring savings for the full year 2025 [4]. - A comprehensive cost reduction program is expected to deliver pre-tax savings of $60 million in 2025, focusing on structural costs mainly in Europe [4]. - PPG has achieved nine consecutive quarters of segment EBITDA margin expansion, indicating a commitment to enhancing profitability [5]. Group 2: Acquisitions and Growth - The company is pursuing inorganic growth through acquisitions, with contributions expected from recent acquisitions such as Tikkurila, Worwag, Cetelon, and Arsonsisi's powder coatings business [6]. - PPG returned$1.4 billion to shareholders in 2024 through dividends and share repurchases, with $620 million in dividends and$750 million in share buybacks [8]. Group 3: Market Challenges - PPG faces soft demand conditions, particularly in the automotive sector, with lower OEM build rates and industrial production impacting sales in the Industrial Coatings unit [9]. - The company anticipates a low single-digit to mid-single-digit percentage decline in industrial coatings segment sales in Q1 2025 due to subdued global industrial production [10]. - Overall organic growth is expected to be limited by lower automotive OEM and industrial production in the first quarter, with continued pressure on industrial coatings demand [10].