Value
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.6 |
| P/S | 9.3 |
| EV/EBITDA | 4.9 |
| Fwd P/E | 8.6 |
| PEG | 4.7 |
| Analyst target | 4.0 |
- ▸Forward P/E: 13.1x
- ▸PEG: 1.79
PPG · Why this verdict
Why PPG Industries (PPG) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
PPG Industries shows strong positive momentum with a 7.1 momentum score, rising on-balance volume, and an RSI of 72 indicating near-term overbought conditions, while the stock has exceeded its analyst target by 8.9% with negative implied upside, leaving the current setup unfavorable despite solid quality metrics and a strong Piotroski F-Score of 8/9.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
At $121.53 the stock is priced 8.9% above the analyst consensus target, meaning there is negative implied upside to the median professional estimate, which is unusual for a hold-rated name and suggests the near-term risk-reward is unfavorable. Bear case | Analyst consensus price targets rise above $130 within 6 months, driven by estimate revisions following earnings results. | Tripped→Stable |
| CounterPPG's positive price momentum and rising analyst sentiment score suggest that consensus estimates may be lagging the fundamental improvement; targets could be revised higher post-earnings. | ||
Momentum scored 7.1 out of 10 with rising on-balance volume, MACD in positive territory, and the stock trading above its 200-day moving average, while RSI of 72 indicates that near-term buying pressure has pushed the stock into overbought territory. Momentum breakdown | RSI returns to below 60 without a significant price correction, allowing the momentum to consolidate at a healthier level before advancing further. | ↓Deteriorating |
| CounterOverbought conditions in a stock with strong institutional accumulation can persist for extended periods; RSI above 70 is not automatically a sell signal in uptrending markets. | ||
PPG scores a Piotroski F-Score of 8/9, ranks above peers on both valuation and return on equity, and generates solid operating margins, representing a high-quality industrial franchise even if growth is currently weak at low single-digit percentages. Quality breakdown | Piotroski F-Score remains at 7 or above in the next 2 annual reporting periods, confirming sustained financial health. | →Stable |
| CounterFree cash flow represents only 46% of net income, a red flag that may reflect high capital expenditure requirements in the coatings business that constrain true shareholder cash generation. | ||
Revenue and earnings growth are both below 5% annually, placing PPG at the lower end of specialty chemicals peers for growth, which means the primary investment thesis must rest on valuation rerating or margin expansion rather than top-line momentum. Bear case | Revenue growth accelerates to above 6% in at least one of the next 4 reported quarters, signaling a reacceleration of organic demand. | →Stable |
| CounterPPG's management has guided toward pricing power in architectural coatings; if raw material costs moderate, margin expansion can more than compensate for subdued volume growth. | ||
At $121.53 the stock is priced 8.9% above the analyst consensus target, meaning there is negative implied upside to the median professional estimate, which is unusual for a hold-rated name and suggests the near-term risk-reward is unfavorable.
Tripped→StableBear case
- Expectation
- Analyst consensus price targets rise above $130 within 6 months, driven by estimate revisions following earnings results.
CounterPPG's positive price momentum and rising analyst sentiment score suggest that consensus estimates may be lagging the fundamental improvement; targets could be revised higher post-earnings.
Momentum scored 7.1 out of 10 with rising on-balance volume, MACD in positive territory, and the stock trading above its 200-day moving average, while RSI of 72 indicates that near-term buying pressure has pushed the stock into overbought territory.
↓DeterioratingMomentum breakdown
- Expectation
- RSI returns to below 60 without a significant price correction, allowing the momentum to consolidate at a healthier level before advancing further.
CounterOverbought conditions in a stock with strong institutional accumulation can persist for extended periods; RSI above 70 is not automatically a sell signal in uptrending markets.
PPG scores a Piotroski F-Score of 8/9, ranks above peers on both valuation and return on equity, and generates solid operating margins, representing a high-quality industrial franchise even if growth is currently weak at low single-digit percentages.
→StableQuality breakdown
- Expectation
- Piotroski F-Score remains at 7 or above in the next 2 annual reporting periods, confirming sustained financial health.
CounterFree cash flow represents only 46% of net income, a red flag that may reflect high capital expenditure requirements in the coatings business that constrain true shareholder cash generation.
Revenue and earnings growth are both below 5% annually, placing PPG at the lower end of specialty chemicals peers for growth, which means the primary investment thesis must rest on valuation rerating or margin expansion rather than top-line momentum.
→StableBear case
- Expectation
- Revenue growth accelerates to above 6% in at least one of the next 4 reported quarters, signaling a reacceleration of organic demand.
CounterPPG's management has guided toward pricing power in architectural coatings; if raw material costs moderate, margin expansion can more than compensate for subdued volume growth.
Per-dimension breakdown
Quality
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.4 |
| ROA | 4.0 |
| Gross margin | 4.2 |
| Op margin | 5.6 |
| Net margin | 4.8 |
| Current ratio | 5.7 |
| FCF quality | 5.4 |
| Moat | 5.5 |
| Piotroski F | 7.8 |
- ▸Earnings quality warning: 70% FCF/NI
- ▸Strong Piotroski F-Score: 7/9
Growth
3.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.3 |
| EPS growth | 1.7 |
Momentum
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.5 |
| MACD | 2.9 |
| OBV | 9.5 |
| MA position | 4.0 |
| Volume | 0.1 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 6.5 |
| erm sentiment | 5.7 |
Insider
4.0/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.0 |
| notable moves | 3.0 |
- ▸Negligible insider buying — $1,398 (0.000% of mkt cap)
Peer rank
5.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.3 |
| quality rank | 7.7 |
| growth rank | 3.7 |
- ▸Attractive P/E vs peers
Technical
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 6.0 |
| support resistance | 6.2 |
| 52w position | 7.4 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.4 |
| days to cover | 7.8 |
| volatility | 5.2 |
| put call | 8.8 |
| implied vol | 7.4 |
| max pain risk | 7.0 |
| beta | 6.7 |
| debt equity | 5.8 |
Catalyst
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 2.6 |
| dividend safety | 7.5 |
- ▸Earnings concerns: 2B/2M
- ▸Dividend aristocrat: 2.6% yield
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:72d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:4.4<4.5
- ASYMMETRY:-0.1=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.08
Upside
-0.5%
Downside
5.8%
Sizing output
AVOID
SetupRange Bound — RSI 44 mid-range, Bollinger mid-band
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 5.2 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Risk (lower is worse) at 7.1) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( MOMENTUM:4.4<4.5, ASYMMETRY:-0.1=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.08 — supplementary context, not the trigger for this path.
The strongest dimensions are Risk (lower is worse) at 7.1, Sentiment at 6.7, and Technical at 6.5; the weakest are Growth at 3.0, Insider at 4.0, and Momentum at 4.4. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of -0.08 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Momentum Overbought Signal
Trip ifRSI remains above 75 for more than 20 consecutive trading days, indicating sustained overbought conditions increasing the risk of a sharp correction.
- P2Analyst Target ExceededTripped
Trip ifThe stock price rises more than 15% above the analyst consensus price target and stays there for more than 30 calendar days.
- P3Quality Piotroski Solid Foundation
Trip ifPiotroski F-Score falls below 6 in any reported annual period over the next 12 months.
- P4Weak Growth Limited Upside Driver
Trip ifRevenue growth falls below negative 3% year-over-year in any reported quarter, indicating organic demand is contracting.