PPG expects 2026 EPS growth mid-single digits, with H2 stronger
PPG reported a solid Q4 with 3% organic growth, but the tone was cautiously optimistic for 2026, with flat to low-single-digit organic growth expected. The company is navigating a mixed macro environment, leveraging share gains in industrial and aerospace to offset weakness in auto refinish and Europe. A key near-term challenge is destocking in the refinish channel, but management expects a recovery in H2. Q4 organic sales growth was 3%, led by strong growth in aerospace and share gains in industrial businesses.
Buzzberg 분석PPG expects 2026 EPS growth mid-single digits, with H2 strongerPPG reported a solid Q4 with 3% organic growth, but the tone was cautiously optimistic for 2026, with flat to low-single-digit organic growth expected. The company is navigating a mixed macro environment, leveraging share gains in industrial and aerospace to offset weakness in auto refinish and Europe. A key near-term challenge is destocking in the refinish channel, but management expects a recovery in H2. Q4 organic sales growth was 3%, led by strong growth in aerospace and share gains in industrial businesses.전체 분석 보기분석 접기
PPG reported a solid Q4 with 3% organic growth, but the tone was cautiously optimistic for 2026, with flat to low-single-digit organic growth expected. The company is navigating a mixed macro environment, leveraging share gains in industrial and aerospace to offset weakness in auto refinish and Europe. A key near-term challenge is destocking in the refinish channel, but management expects a recovery in H2. Q4 organic sales growth was 3%, led by strong growth in aerospace and share gains in industrial businesses.
Auto refinish sales declined due to distributor destocking, but management sees early signs of normalization (claims down 2% in Dec, fill-in orders).
2026 guidance calls for flat to low-single-digit organic growth, with EPS growth of mid-single-digits, weighted heavily to H2.
Management highlighted significant share gains in packaging coatings, auto OEM, and aerospace, driven by technology and service rather than macro.
Revenue$3.914B
reported
EPS$1.51
reported
Gross margin37.4%
reported
Op margin11.5%
reported
이번 분기에 달라진 점
01
Guidance
PPG expects 2026 EPS growth mid-single digits, with H2 stronger
Guidance tone
02
Demand
Refinish destocking expected to normalize in second half of 2026
Management emphasized strong Q4 organic growth momentum, share gains, and positive 2026 expectations despite macro headwinds, and expressed excitement about AI and aerospace growth.
PPG's capex in 2025 was approximately $780 million, a high-water mark for growth investments including aerospace expansions in Mexico and digital/AI capabilities. They expect to return to historical levels of about 3% of sales by 2027, suggesting a pullback in growth capex…
04
AI
AI-formulated products commercialized in refinish and across portfolio
PPG is investing in AI and digital capabilities, including internally developed formulation AI, which has already produced its first AI-formulated refinish clearcoat and optimized 50 existing products. Management believes this is a differentiator, though it contributed only…
AI, 자본지출 및 수요 분석
AI
플랫폼 및 수익화
PPG is investing in AI and digital capabilities, including internally developed formulation AI, which has already produced its first AI-formulated refinish clearcoat and optimized 50 existing products. Management believes this is a differentiator, though it contributed only millions to the bottom line so far and is considered early days, with more material impact expected.
수요
수주 및 전환
Refinish destocking expected to normalize in second half of 2026. Management emphasized strong Q4 organic growth momentum, share gains, and positive 2026 expectations despite macro headwinds, and expressed excitement about AI and aerospace growth.
자본지출
투자 및 생산능력
PPG's capex in 2025 was approximately $780 million, a high-water mark for growth investments including aerospace expansions in Mexico and digital/AI capabilities. They expect to return to historical levels of about 3% of sales by 2027, suggesting a pullback in growth capex after 2025.
톤 · Confident
Management emphasized strong Q4 organic growth momentum, share gains, and positive 2026 expectations despite macro headwinds, and expressed excitement about AI and aerospace growth.
병목
Manufacturing capacity
Also the operating expense increase as we have folks trying to de-bottleneck our existing operations.
“Also the operating expense increase as we have folks trying to de-bottleneck our existing operations.”
Management frames its own growth as largely independent of macro, driven by share gains, and cites specific competitor anxieties in the refinish channel as a tailwind for PPG.
“there is clearly industry anxiety out there, partly driven by the pressure that body shops have been on for the last 18 months, but also driven by consolidations, divestitures in this industry. And what all of those anxieties play to our s…”
Aerospace is capacity-constrained; PPG is spending over $120M on de-bottlenecking and announced a new $380M factory for sealants and coatings to meet demand.
“We are capacity constrained. No doubt about it. That's why our CapEx has been above our historical norm for the last couple of years. Round numbers, I approved about 120 million of CapEx last year that I would call incremental aerospace, d…”
The destocking in the auto refinish channel is ongoing but approaching a bottom; PPG sees fill-in orders and normalizing insurance premiums as leading indicators of a recovery in H2 2026.
“We did start to see what we call fill-in orders from our distributors. So this multi-quarter destocking, you can only destock so far before you've got to supply the body shops, and that's when you start. did start to see those in December.”
Raw material costs are flat, but specific input prices are inflating due to tariffs, namely epoxies, specialty pigments, and metal packaging, while TIO2 remains soft.
“I put them in three categories. Epoxies are up a bit because of tariffs. ... The second one is pigments. ... And the other category that's up is metal packaging. And everybody knows what's happening on the aluminum and steel tariffs. Those…”
This is a speculative inference—while PPG's aerospace business is growing strongly across military and commercial segments, there is no explicit mention of Anduril. The mention is flagged as low-confidence and likely not a real mention.
“But, you know, we're not done. This business will be growing likely for the rest of my career.”
Thank you. Good morning. Tim, on aerospace, can you tell us what the growth, what the sales growth was in 2025, and are you at all capacity constrained in 26? ahead of the new supply capacity coming on next year.
Thanks, David. The growth rate for 2025 was double digit. By the way, it was double digit in 24 as well. We expect continued growth. You're starting to lap double digit on top of double digit. Denominators are getting bigger. By the way, this business is almost the same size as refinish now. So the denominator is getting bigger and bigger as you start lapping multiple double digits. So we're guiding high single digits for 2026, I think, for aerospace. We are capacity constrained. No doubt about it. That's why our CapEx has been above our historical norm for the last couple of years. Round numbers, I approved about 120 million of CapEx last year that I would call incremental aerospace, de-bottlenecking CapEx expansion. We've also brought in a number of consultants to help us just with with de-bottlenecking on the expense side. And that's why you see some of the margin challenges that I think Kevin asked about. And in addition to that 120 or so, we announced $380 million new factory. That'll take about two years to bring online for the sealants and coating side of the business. And we're working on some other capacity expansions. I can't get ahead of my board here. But, you know, we're not done. This business will be growing likely for the rest of my career. And hopefully that's longer than Mr. Morales' career here. So we see that coming as far as our forecast goes.
PPG is referencing S&P Global's automotive production forecasts as a benchmark for market demand, which they expect to be weak in Q1 and flat thereafter.
“you know, S&P has Q1 down. The rest of the year, call it flat-ish.”
most of us would still call the macro you know muted or even meager and yet your organic growth you know with maybe one exception has been pretty solid across a lot of the kind of the substrates and the facets you've been focusing on the last few years could you just add a little bit of insight on what you saw in the fourth quarter and how you're thinking about you know everything in 2026 in terms of breaking that growth down is was the macro actually slightly better than you anticipated is it all share gain is it new product introductions um if you could kind of just break that down and how You know, that breakdown would actually lead you to think about your 26 guidance. That would be…
Yeah. Hey, Chris, I guess a high level answer. I'll get in some details for you here. The high level answer is macro is not better than we expected. And to your questions about is our growth based on macro share gain or technology introductions? The answer is yes, yes and yes. So the spaces where we're seeing macro help. You know, aerospace, right, that continues to crush it for us. The sequential improvement in Mexico, that helps us. And, you know, I'd say still a pretty strong, robust PMC market. When you look across the rest of our businesses, well, and those businesses, if you think about auto OEM, you know, S&P has Q1 down. The rest of the year, call it flat-ish. But we're committed to outperform in that, and we will grow. Packaging industry is very mixed bag, and we're crushing it there with multiple quarters of double digit. And that's largely share game, and I will tell you largely Europe, where we're doing quite well there. If you look at the other businesses, architectural Europe, still flat-ish. industrial or general industrial which as you know is the catch-all it's um you know some some segments are up some are down overall i still call it pretty flat so really there's a few markets where um we're getting macro help most of our businesses were getting share gain help and to the technology question A lot of the share that we're gaining in packaging is technology driven. A lot of the share that we're gaining in refinish, even though the stocking is covering this right now, a lot of the share gain is driven by the productivity tools that we launched. So it's really a combination of all three. But high level, I don't think anything has changed significantly with our view of the macro.
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