Analyst William Young said he raised his rating of coatings and glass company PPG Industries (PPG) to strong buy from hold after the Federal Reserve's recent interest rate cut, which should help spur economic growth.
PPG shares rose 2-5/8, to 48 1/8, after Young's report.
Investors view the company as an early cycle stock, Young said, but the recent 50 basis point reduction in short-term interest rates should accelerate interest in the cyclical chemical group. He said the company's highly regarded management team has a history of not overpaying for acquisitions and successfully integrating these businesses.
Young expects earnings per share of 2000 to come in at $3.75 and 2001 EPS to come in at $3.50. He sees peak EPS at $6.20 in 2003. In 18 months, the shares could reach the $65 to $70 range, which is equal to P/E and EV/EBITDA ratios of 10.5, 5.7, respectively.