DCF Studio

    PPG · NYQ · Basic Materials

    PPG Industries, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 101.41

    Market price

    USD 124.89

    Implied upside

    -18.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    Value Per Share

    Perpetuity growth
    USD 101.41-18.8%
    Exit multiple
    USD 118.84-4.8%
    Market price
    USD 124.89

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 16.8bnUSD 17.3bnUSD 17.8bnUSD 18.3bnUSD 18.9bnUSD 19.4bnUSD 19.9bnUSD 20.4bnUSD 21.0bnUSD 21.5bn+2.8%
    EBITUSD 2.2bnUSD 2.3bnUSD 2.3bnUSD 2.4bnUSD 2.5bnUSD 2.5bnUSD 2.6bnUSD 2.7bnUSD 2.7bnUSD 2.8bn+2.8%
    NOPATUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.9bnUSD 2.0bnUSD 2.0bnUSD 2.1bnUSD 2.1bnUSD 2.2bnUSD 2.2bn+2.8%
    Add depreciation & amortisationUSD 538.6mUSD 554.8mUSD 571.1mUSD 587.6mUSD 604.2mUSD 620.8mUSD 637.5mUSD 654.3mUSD 671.0mUSD 687.8m+2.8%
    Less capital expenditureUSD -661.8mUSD -695.3mUSD -729.7mUSD -765.2mUSD -801.5mUSD -838.8mUSD -877.0mUSD -916.1mUSD -956.0mUSD -996.7m+4.7%
    Capex, % of revenue3.9%4.0%4.1%4.2%4.2%4.3%4.4%4.5%4.6%4.6%-
    Less increase in working capitalUSD -84.6mUSD -45.5mUSD -45.9mUSD -46.2mUSD -46.5mUSD -46.7mUSD -46.9mUSD -47.0mUSD -47.1mUSD -47.1m-6.3%
    Free cashflow to firmUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.8bnUSD 1.9bn+2.2%
    Discount factor0.96230.89100.82510.76400.70740.65500.60650.56160.52000.4815-
    Present valueUSD 1.5bnUSD 1.4bnUSD 1.4bnUSD 1.3bnUSD 1.2bnUSD 1.1bnUSD 1.1bnUSD 1.0bnUSD 956.4mUSD 900.2m-
    Present Value Of The ForecastUSD 11.8bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.991Reported 0.987, pulled toward 1.0 (Blume)
    Cost of equity9.09%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 9.0x interest cover. Book interest / average debt was lower, at 3.4%.
    Market capitalisationUSD 27.6bn77.7% of capital
    Total debtUSD 7.9bn22.3% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC8.00%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 101.41

    59% of EV

    Forecast FCFF, final year
    USD 1.9bn
    Capex at depreciation, working capital in reinvestment
    USD 2.4bn
    Less reinvestment at g/ROIC (20.9% of NOPAT)
    USD -496.7m
    Capitalised
    USD 1.9bn
    ROIC (reported)
    11.9%
    Terminal value, undiscounted
    USD 35.0bn
    Terminal value, discounted
    USD 16.9bn
    Enterprise value
    USD 28.7bn
    Less net debt
    USD 5.7bn
    Equity value
    USD 23.0bn

    Exit at 12.3x EBITDA

    Value per shareUSD 118.84

    64% of EV

    Terminal value, undiscounted
    USD 43.2bn
    Terminal value, discounted
    USD 20.8bn
    Enterprise value
    USD 32.7bn
    Less net debt
    USD 5.7bn
    Equity value
    USD 27.0bn

    Spread between methods: 16%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    6.00%153.31161.02171.26185.29205.40
    7.00%120.83124.21128.58134.30141.97
    8.00%98.3899.69101.41103.68106.68
    9.00%81.9582.1882.6083.2484.17
    10.00%69.4069.0668.7968.6268.55

    Outlined: this model. Green text: above today's price of 124.89. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year0.6%3.1%5.2%
    EBIT margin14.4%13.1%15.6%
    Discount rate-8.0%7.1%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.