Value
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 7.5 |
| P/S | 9.2 |
| EV/EBITDA | 5.0 |
| Fwd P/E | 8.4 |
| PEG | 4.9 |
| Analyst target | 4.0 |
- ▸Forward P/E: 13.7x
- ▸PEG: 1.62
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. How we score · Editorial policy
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VerdictSELL
Overall score5.4/10
ConfidenceMEDIUM
MacroRISK_OFF
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. | ↓Deteriorating |
| 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. | ↑Improving |
| 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. | ↓Deteriorating |
| 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.
↓DeterioratingBear 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.
↑ImprovingMomentum 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.
↓DeterioratingBear 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
8.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.1 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 10.0 |
| vol acceleration | 9.1 |
- ▸Overbought (RSI 77)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
- ▸Volume surge (2.5x avg) on up move
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.7 |
| Analyst rating | 7.5 |
| Price target | 5.9 |
Insider
4.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 4.4 |
| notable moves | 3.0 |
- ▸Negligible insider buying — $1,368 (0.000% of mkt cap)
Peer rank
5.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 6.7 |
| quality rank | 7.6 |
| growth rank | 3.8 |
- ▸Attractive P/E vs peers
Technical
3.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 1.2 |
| 52w position | 8.1 |
| gap | 3.0 |
- ▸Extreme gap up (5.1%) - may pull back
Risk (lower is worse)
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.3 |
| days to cover | 6.8 |
| volatility | 5.9 |
| put call | 8.6 |
| implied vol | 4.9 |
| max pain risk | 3.0 |
| beta | 6.8 |
| debt equity | 5.8 |
- ▸Above max pain $101
Catalyst
5.3/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 3.3 |
| earnings timing | 5.0 |
| surprise avg | 3.0 |
| dividend safety | 7.5 |
| news activity | 8.0 |
- ▸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)
- MOMENTUM:8.7>=5.5
- INSIDER:OK
- 8K:CLEAN
- EARNINGS_PROXIMITY:89d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.3=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.32
Upside
-4.5%
Downside
14.1%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.8 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Momentum at 8.7) was not enough to lift the adjusted overall above the threshold. Co-occurring failed gates ( ASYMMETRY:-0.3=NEGATIVE) reinforce the read. Current asymmetry R:R is -0.32 — supplementary context, not the trigger for this path.
The strongest dimensions are Momentum at 8.7, Value at 6.4, and Sentiment at 6.4; the weakest are Growth at 3.0, Technical at 3.1, and Insider at 4.1. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.32 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 Exceeded
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.