PPG Industries, Inc. PPG announced its engagement with Goldman Sachs & Co. LLC as a financial advisor. The purpose is to explore strategic alternatives for its architectural coatings business in the United States and Canada.

The architectural coatings business within PPG's performance coatings segment boasts a strong presence in both residential and commercial markets with recognizable brands like GLIDDEN, OLYMPIC, LIQUID NAILS and others. Offering a range of interior and exterior paints, stains, caulks and adhesives for homeowners and professionals, the business established itself across more than 15,000 touchpoints, including company-owned stores, independent dealers and major retail outlets in the United States and Canada.

In 2023, the U.S. and Canada architectural coatings business accounted for approximately 10% of PPG's total net sales. Despite flat sales volumes in 2023, the company's overall sales volumes (on a three-year pro forma basis) saw improvement, excluding this segment. The Performance Coatings segment's operating income witnessed improvement, excluding the U.S. and Canada architectural coatings EBIT and associated growth investments.

PPG Industries, Inc. Price and Consensus

 

PPG Industries, Inc. price-consensus-chart | PPG Industries, Inc. Quote

 

PPG's Chairman and CEO, Tim Knavish, expressed confidence in the architectural coatings business's trajectory, citing advancements in digital tools, manufacturing, distribution and product innovation. He emphasized the company's commitment to ensuring growth, success, and shareholder value through a strategic review. This review aims to evaluate potential partnerships, ownership structures, or joint ventures that could accelerate growth and enhance market presence.

The strategic actions, which also include the review of the silica products business announced in January, reflect PPG's commitment to disciplined evaluation and alignment with growth strategies. However, the outcome and timeline of the review remain uncertain and PPG does not intend to provide updates unless necessary.

It's worth noting that the strategic review pertains only to the U.S. and Canada architectural coatings business, excluding other regions where PPG holds significant market positions.

PPG Industries’ shares have increased 8.2% in the past year compared with the industry’s growth of 23.3% over the same period.

Image Source: Zacks Investment Research

Zacks Rank & Key Picks

PPG currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Basic Materials space are Carpenter Technology Corporation CRS, sporting a Zacks Rank #1 (Strong Buy), Eldorado Gold Corporation EGO and Hawkins, Inc. HWKN, both carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.