Analyst Note| Spencer Liberman |
Narrow-moat PPG’s first-quarter results were largely in line with our expectations, as lower volume was offset by higher selling prices. Raw material inflation and supply chain disruptions persist, with management estimating that supply chain issues negatively impacted sales by roughly $180 million (down from $150 last quarter). Despite this incremental growth, management expects disruptions to moderate through 2022. Raw material inflation remains a concern as costs rose 25% year over year, while selling prices were up about 10%. We anticipate additional selling price increases as raw material inflation and supply chain constraints boost costs.