PPG Highly Leverage To A Rebound In Auto Production
Analyst PJ Juvekar of Citigroup upgrades PPG Industries Inc (NYSE: PPG) from "hold" to "buy," while raising his estimates for the company. The target price for PPG has been raised from $62 to $71.
According to Citigroup, PPG Industries is poised to capitalize on the anticipated rebound in auto production during 2010. The analyst expects auto production in the US to rebound 35% YoY in 2010. PPG has significant exposure to the OEM and auto refinish areas, the analyst says.
PPG Industries’ earnings are highly correlated to industrial production over the past 20 years. The US industrial production is improving since July 2009 and would continue to improve in 2010, the analyst believes. Citigroup has raised its EPS estimate for 2010 from $3.72 to $3.95.
