Wells Fargo analysts upgraded PPG Industries (NYSE:PPG) from Equal Weight to Overweight and increased their price target on the stock from $140 to $163. The analysts believe that exiting the US architectural coatings market is a smart strategic decision for PPG, enabling the company to capitalize on the improving earnings potential alongside the housing market’s recovery. This move positions PPG to more effectively achieve its 8-12% EPS growth targets, with a more streamlined coatings portfolio expected to drive solid earnings growth in 2024, estimated at around 10% year-over-year.

Volume growth is expected to turn positive in the second quarter of 2024, with projections of 1% growth for the year and 2.6% in 2025. The anticipated increase in volumes is attributed to improvements in China, India, and Mexico, stability in Europe, and robust growth in the Aerospace and Refinish sectors. Additionally, the divestiture of the US architectural business could offer further growth opportunities for Performance Coatings.

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