Citigroup raises PPG's EPS & target share price

20 July 2007 09:51  [Source: ICIS news]

MUMBAI (ICIS news)--Citigroup on Friday raised PPG Industries' price target and earnings per share (EPS) estimates, reflecting the company’s planned acquisition of Dutch coatings company SigmaKalon Group, while maintaining a 'buy' rating on the stock.

 

It raised its price target for the US-based coatings and specialty products company to $91 (€66) per share from $81. It also increased PPG's 2007 EPS estimate to $5.39 from $5.28 and 2008 EPS forecast to $5.80 from $5.50.

 

"PPG’s architectural paints business in Europe failed to compliment its industrial and auto coatings franchises and the SigmaKalon purchase will provide that," Citigroup said.

 

Although there will be charges for inventory step-up and restructuring, the deal is accretive in the first year on an ongoing earnings basis, it added

 

Citigroup rated PPG at medium risk due to its exposure to the auto and housing markets.

 

"The planned divestitures of low margin businesses and the SigmaKalon acquisition will make PPG the number player in the global coatings industry," it added.

 

PPG shares closed marginally up by $0.08 at $80.50 on Thursday on the New York Stock Exchange.

 

($1 = €0.72)

By: Aarti Kapoor
+65 6780 4359

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