Citigroup cuts PPG’s EPS forecast on US downturn

18 April 2008 10:34  [Source: ICIS news]

MUMBAI (ICIS news)--Citigroup has lowered its earnings per share (EPS) estimates for US-based PPG Industries in the wake of first-quarter results announced on Thursday and due to a significant weakening in its domestic market, the bank said on Friday.

"While PPG’s international exposure insulates it from the troubled North American housing market, we see limited upside as the chlor-alkali cycle plateaus and other end markets experience softness," Citigroup said in a research note to clients.

Citigroup lowered the coating and chemical manufacturer’s earnings per share (EPS) estimate for 2008 to $5.13 (€3.23), from $5.14, its 2009 EPS figure to $5.49, from $5.68 and trimmed its 2010 estimate to $6.24, from $6.58. 

The bank maintained its "hold" rating and price target of $66 per share on the company, it added.

The risk to the firm’s call could come from its exposure to auto and housing markets, volatility of natural gas prices and being a defendant in lawsuits involving asbestos claims which had a liability of $899m, Citigroup said.

However, Bank of America (BoA) maintained its 2008 and 2009 estimates on PPG Industries, it said.

"We consider PPG a well-managed company with ongoing, favorable portfolio transformation," BoA added.

The recent $3bn acquisition of Sigma-Kalon should accelerate this transformation, it added.

PPG's stock closed up 1.17% on Thursday at $64.75 on the New York Stock Exchange.

($1 = €0.63)


By: Aaron Rodrigues
+65 6780 4359



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