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PPG Industries, Inc. PPG is gaining from pricing actions, enhanced manufacturing efficiencies, cost discipline and acquisitions amid headwinds from demand weakness, especially in Europe.

The company’s shares are down 24% over the past year compared with the Zacks Chemicals Specialty industry’s 5.6% decline.

Let’s find out why PPG stock is worth retaining at the moment.

Image Source: Zacks Investment Research

Cost & Pricing Actions, Acquisitions Aid PPG

PPG Industries is implementing a cost-cutting and restructuring strategy and optimizing its working capital requirements. The cost savings generated by these restructuring initiatives will act as a tailwind for the company. It has undertaken extensive restructuring efforts to reduce its cost structure, primarily focusing on regions and end markets with weak business conditions. The company realized an additional $15 million in structural cost savings in fourth-quarter 2024. It expects around $45 million in restructuring savings (net of stranded costs) for full-year 2025. PPG also announced a comprehensive cost reduction program, which is expected to deliver pre-tax savings of $60 million in 2025. The program includes the reduction of structural costs, mainly in Europe and in certain other global businesses. 

PPG Industries is also raising selling prices across its business segments to offset the impact of cost inflation and drive profitability. Significant progress has been made in increasing consolidated segment margins. PPG Industries achieved the ninth consecutive quarter of segment EBITDA margin expansion in the fourth quarter of 2024, underscoring its sustained commitment to enhancing overall profitability.

The company is also undertaking measures to grow business inorganically through value-creating acquisitions. Contributions from the acquisitions are expected to be reflected in its performance. Acquisitions, including Tikkurila, Worwag, Cetelon and Arsonsisi’s powder coatings manufacturing business, are likely to contribute to its top line.

PPG Industries also remains committed to boosting shareholder returns with cash deployment. It has an impressive record of returning cash to shareholders through dividends and share buybacks. In 2024, the company returned $1.4 billion to shareholders through dividends and share repurchases. It paid dividends worth $620 million in 2024. PPG also bought back $750 million of shares in 2024. PPG's robust financial performance is reflected in the substantial operating cash flow generation, which reached around $1.4 billion in 2024.