Is PPG Industries Inc (PPG) overvalued?
On Equity Rank's model estimate, PPG trades 11% below its fair value. PPG Industries Inc (PPG) last closed at $122.38; the multi-method model fair value is $137.36.
| Price | Model fair value | Price vs model |
|---|---|---|
| $122.38 | $137.36 | 11% below |
What the answer rests on
- 5 of 12 valuation methods put PPG's value above its price and 7 put it below, so the methods disagree.
- To justify today's price, PPG's free cash flow would need to grow about 9.1% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 37.7% a year.
- PPG trades at 17.9 times its last year's earnings, against a median of 28.2 for 26 profitable Specialty Chemicals companies.
- Over the past year the price sat below the model fair value on 100% of trading days. The gap ranged from 34% below to 10% below the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind PPG's fair value · What prices assume · Other companies