Key insights
- RBC Capital maintains a positive outlook on PPG Industries' aerospace segment, citing its strong product portfolio and market share gains with OEMs like Embraer. Despite broader macro headwinds affecting over 60% of PPG's sales, the aerospace business is expected to grow at a mid-to-high single-digit CAGR through 2028, supported by industry growth and a solid backlog. This specific strength in a key industrial sector could provide a modest positive signal for related equities.
Investing.com - RBC Capital reiterated a Sector Perform rating and $119.00 price target on PPG Industries (NYSE:PPG) following a review of the company’s aerospace business. The stock currently trades at $116.36, below both RBC’s target and InvestingPro’s Fair Value analysis, which suggests the shares are undervalued.
The firm highlighted PPG’s comprehensive product portfolio as a competitive advantage in aerospace, where the company leads across all market segments including sealants and adhesives, transparencies, engineered materials, and coatings. Most competitors focus on a single vertical, such as 3M, Chemetall, and Henkel in sealants and adhesives, and St.-Gobain and GKN in transparencies.
PPG’s broad portfolio has enabled the company to increase share of wallet with large original equipment manufacturers such as Embraer and outgrow the aerospace market, which is estimated to grow at a 7% compound annual growth rate from 2025 to 2028 in a $5 billion total addressable market. The firm noted that Embraer has reduced production time from 45 to 27 days, representing a roughly 40% reduction.
RBC Capital sees minimal risk to PPG’s mid-to-high single-digit aerospace compound annual growth rate through 2028 given a robust $315 million backlog split 60/40 between aftermarket and original equipment manufacturer sales. The firm noted a 7% aerospace industry compound annual growth rate from 2025 to 2028, supported by 12% commercial original equipment manufacturer builds growth, 3% business jet growth, and 6% military original equipment manufacturer growth.
The firm sees persistent macro headwinds for more than 60% of PPG sales, as Europe, Middle East and Africa architectural coatings are unlikely to improve until 2028-2029, refinish and automotive original equipment manufacturer segments face affordability issues, and industrial segments excluding performance and maintenance coatings and packaging need stronger global industrial production.Despite these challenges, InvestingPro data reveals PPG has raised its dividend for 55 consecutive years and trades at a PEG ratio of just 0.33, suggesting attractive value relative to growth. For deeper insights into PPG’s investment potential, including comprehensive Pro Research Reports that transform complex data into clear intelligence, explore the full analysis on InvestingPro.
In other recent news, PPG Industries reported impressive first-quarter 2026 financial results, surpassing earnings and revenue expectations. The company posted an earnings per share (EPS) of $1.83, exceeding the forecasted $1.70, marking a 7.65% surprise. Revenue also outperformed projections, reaching $3.9 billion compared to the anticipated $3.84 billion. Meanwhile, PPG announced the appointment of John Smith as vice president of architectural coatings for the EMEA region, effective July 1, 2026. This leadership change comes as Steve Pocock prepares to retire at the end of June 2026. In other industry developments, Bank of America highlighted a decline in auto collision repair volumes, citing weak demand for auto refinish coatings. Additionally, Baird observed a deceleration in packaging materials inflation, suggesting a potential plateau following recent spikes in raw material costs. These recent developments provide a snapshot of the current landscape for PPG Industries and its market environment.
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