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PPG Industries Takes A Hit From Natural Disasters, But Buyers Aren't Deterred

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PPG Industries Takes A Hit From Natural Disasters, But Buyers Aren't Deterred
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On Monday morning, PPG Industries, Inc. (NYSE: PPG) updated its guidance and informed investors that the recent natural disasters, including hurricanes Maria, Irma and Harvey and the earthquakes in Mexico, will cost the company between 5 and 10 cents in diluted EPS in the third quarter. Despite the negative impact, PPG shares continued their bullish momentum on Monday, suggesting the market is relieved there will not be a more severe impact from the disasters.

“Excluding the unfavorable impacts from the hurricanes and the earthquakes, our third-quarter volume growth rate is expected to be above 1.5 percent, exceeding our growth rate for the first half of 2017,” CEO Michael McGarry said.

After initially dipping as low as $108.00 Monday morning, PPG shares quickly bounced back, trading up 0.6 percent to $109.48 in midday trading.

PPG stock is now up 5.6 percent in the past month after the stock crashed 6 percent after a disappointing Q2 earnings report in July. The stock briefly surpassed $110 on Monday for the first time since before its Q2 earnings report, and investors seem optimistic given the new Q3 guidance. PPG is calling for Q3 EPS of between $1.48 and $1.55 when it reports on Oct. 19.

From a technical standpoint, Monday’s move may have PPG on track to re-test the $113–$115 level that represents the stock’s all-time highs. PPG has failed to break above that critical resistance level despite numerous attempts in the past three years. PPG reached as high as $114.56 in March 2015, $114.68 in June 2015, $114.27 in April 2016 and $113.18 in July of 2017 prior to the Q2 revenue disappointment.

Joel Elconin contributed to this story.

Related Link: Can Generac Hold Its Charge After Harvey And Irma?

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Image Credit: via Wikimedia Commons

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