PPG Industries stock inched 1.3% higher to about US$120 today, a muted move for a coatings heavyweight that just posted a record quarter. The company’s Q3 2026 numbers landed with adjusted earnings per share of roughly US$2.25 and an adjusted EBITDA margin above 18%, enough for management to lift full year guidance.
The short term read is simple: traders marked the price up modestly. The longer view is where it gets interesting, with a lower P/E, higher earnings power and a leverage profile that now matters more for long term holders than today’s one day pop.
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Q3 2026 Earnings Summary
- Revenue (Q3 2026 vs Q3 2025): US$4,353 million vs. US$4,082 million (up about 6.6%)
- Net Income, Excl. Extra Items (Q3 2026 vs Q3 2025): US$473 million vs. US$444 million (up about 6.5%)
- Basic EPS (Q3 2026 vs Q3 2025): US$2.13 vs. US$1.97 (up about 8.2%)
- Adjusted EBITDA Margin (Q3 2026 vs Q3 2025): above 18% compared with the prior-year level (expanded, a Q3 record margin performance)
Earnings tell you what PPG Industries just booked, but the cash actually coming in and out of the business is what valuation focused investors usually care about most.
When you shift the lens from income to cash generation for PPG Industries, the stock could be a whopping 34% undervalued.
PPG bullish story: capacity and mix shift under the microscope
The upbeat narrative says PPG Industries can turn aerospace and higher value coatings capacity into durable profit, not just one off wins.
"PPG Industries is building out its aerospace and protective and marine coatings capacity, supported by a roughly US$300 million aerospace backlog and more than US$0.5 billion of related investments. This activity can support higher revenue and segment earnings as orders are fulfilled and converted into shipments."
Aerospace just delivered double digit organic growth with the segment helping push Performance Coatings EBITDA margin to about 24%. Record company wide EBITDA above 18% and raised EPS guidance show that backlog and capacity are now feeding through, especially in aerospace and marine. Architectural EMEA margins above 20% also support the higher value mix story.
PPG bearish story: cost execution and auto risk still in play
The bear case argues that cost cuts and pricing discipline might stumble, especially where indexed contracts and auto exposure bite.
"Industrial Coatings pricing that is tied to index based contracts has already led to a 1% decline in selling prices. Management now expects further EBITDA margin compression in the second half of 2026 as raw material costs rise faster than indexed price resets, which could reduce revenue quality and group earnings even if volumes hold up."
That concern is visible. Industrial Coatings EBITDA fell 11% with margin slipping to roughly 14.4% as cost of goods inflation outran pricing. Management still flags margin pressure into Q4, even though enterprise level price cost is now neutral. Execution risk in this division remains a live issue despite strength elsewhere in PPG Industries.
That disagreement has a full argument behind it. → Uncover the higher Fair Value this Narrative argues for.
Hunt For Mispriced Earnings Power
PPG Industries reported a solid quarter with a restrained share price reaction that still invites discussion. The real opportunity is finding stocks that may be undervalued before the market reassesses their earnings power.
- Company 1 - 40% below our estimate - grows a former niche beverage into broader retail shelves while expanding private label and e-commerce partnerships.
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Those are three of them. See all 30 potentially undervalued companies →
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