PPG Industries PPG FAIRLY VALUED Buying Index™ 4 Value …

Valuentum Retail Equity Research Ratings as of 1-Aug-2021 Data as of 30-Jul-2021

Buying Index™ 4 Value RatingEconomic Castle

Attractive

Investment ConsiderationsDCF ValuationRelative Valuation

Stock Chart (weekly) ValueCreation™ValueRisk™ValueTrend™Cash Flow GenerationFinancial LeverageGrowthTechnical EvaluationRelative StrengthMoney Flow Index (MFI)Upside/Downside Volume (U/D)Near-term Technical Resistance, 10-wk MADCF = Discounted Cash Flow; MFI, U/D = Please see glossary. MA = Moving Average

Business Quality ValueCreation™

ValueRisk™ Very Poor Poor Good ExcellentCompany Vitals Investment HighlightsMarket Cap (USD) $38,901Avg Weekly Vol (30 wks) 6,46330-week Range (USD) 132.1 - 182.97Valuentum Sector Materials5-week Return -3.8%13-week Return -9.4%30-week Return 11.3%Dividend Yield % 1.4% Firms that generate economic profits with little operating variability score near the top right of the matrix.

Dividends per Share 2.36 Relative Valuation Forward P/E PEG Price / FV

Forward Dividend Payout Ratio 29.0% Air Products & Chemicals 31.8 1.9 115.0%Est. Normal Diluted EPS 11.03 BHP Billiton 21.9 1.9 119.0%P/E on Est. Normal Diluted EPS 14.8 DuPont 19.8 NMF 107.2%Est. Normal EBITDA 4,027 Sherwin-Williams 30.5 3.0 118.8%Forward EV/EBITDA 13.2 Peer Median 26.2 1.9 116.9%EV/Est. Normal EBITDA 10.6 PPG Industries 20.1 1.4 103.5%Forward Revenue Growth (5-yr) 7.9% Price / FV = Current Stock Price divided by Estimated Fair Value

Forward EPS Growth (5-yr) 26.7% Financial Summary ProjectedNMF = Not Meaningful; Est. = Estimated; FY = Fiscal Year

Fiscal Year End: Dec-19 Dec-20 Dec-21

Returns Summary 3-year Historical Average Revenue 15,146 13,834 16,753Return on Equity 23.8% Revenue, YoY% -1.5% -8.7% 21.1%Return on Assets 7.2% Operating Income 1,946 1,780 2,658ROIC, with goodwill 16.6% Operating Margin % 12.8% 12.9% 15.9%ROIC, without goodwill 27.6% Net Income 1,243 1,056 1,900ROIC = Return on Invested Capital; NMF = Not Meaningful Net Income Margin % 8.2% 7.6% 11.3%Leverage, Coverage, and Liquidity Diluted EPS 5.22 4.44 8.15In Millions of USD Diluted EPS, YoY % -3.2% -14.9% 83.6%Total Debt 5,749 Free Cash Flow (CFO-capex) 1,667 1,826 2,078Net Debt 3,827 Free Cash Flow Margin % 11.0% 13.2% 12.4%Total Debt/EBITDA 2.5 In Millions of USD (except for per share items)

Net Debt/EBITDA 1.7 LARGE-CEBITDA/Interest 16.6 POORCurrent Ratio 1.4Quick Ratio 1.0

• PPG is a Dividend Aristocrat, having raised itsdividend in each of the past 45+ years. We like thecompany’s dividend growth potential, though wecaution share buybacks and acquisitions will competefor capital in the future.

NMF = Not Meaningful

The information and data contained in this report is not represented or warranted to be timely, complete, accurate, or correct. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this report, you should consider whether the information is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

Structure of the Chemicals IndustryThe broad chemicals industry includes firms that make thousands of different chemical substances, ranging from basic raw materials to advanced specialty chemicals. Making chemicals is a cyclical and energy-intensive business, with volatile oil/gas prices influencing feedstock, operation, and transportation costs. Specialty providers can carve out niches, but commodity chemicals producers are largely undifferentiated, making it impossible to gain a sustainable competitive edge. The industry is very capital intensive, and large swings in prices and volume should be expected. We don’t like the industry structure.

• Since 2004, the firm has undergone a significantshift in operational focus. Coatings accounted for~56% of its business in 2004. Today, coatings accountfor the entirety of its portfolio. Acquisitions are worthwatching going forward.

• We like PPG's organic growth potential via emergingmarket expansion, increased sales content per airplane, and auto production. In the near-term, the COVID-19pandemic has created significant headwinds for PPG,though its long-term outlook remains promising. Rawmaterial inflation will impact margins, but it continuesto optimize its cost structure.

----- Actual -----

• PPG isn’t too capital-intensive (annual capitalexpenditures have historically averaged ~2.5% ofsales), has pricing power, and its top-market shareposition in the ~$140 billion consolidating coatingsindustry is hard not to like and may be vital for it tofight off the impact of recent cost inflation.

Medium

High

Low 1• PPG Industries is a leading supplier of paints,coatings, specialty materials, flat glass and fiber glass.United States and Canada account for ~40%-45% ofthe company's business. PPG Industries continues topost excellent financial results, and management isfiscally prudent (albeit acquisitive). The firm wasfounded in 1883. Very High

BEARISHWEAK

NEUTRALBEARISH

170.00

The week with the highest trading volume out of the last 30 weeks was a week of heavy selling, or distribution (red bar).

EXCELLENTLOW

POSITIVESTRONGMEDIUMMODEST

We increased our fair value estimate (again) for PPG Industries as the company's pricing power is helping offset headwinds from inflationary pressures, to a degree.

FAIRLY VALUEDATTRACTIVE

Industry $158.00 $126.00 - $190.00 LARGE-CAP CORE Materials Mining & Chemicals

Visit us at www.valuentum.com

PPG Industries PPG FAIRLY VALUED Estimated Fair Value Fair Value Range Investment Style Sector

112.00

122.00

132.00

142.00

152.00

162.00

172.00

182.00

192.00

0

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60,000,000

Valuentum Retail Equity Research (10=best) Data as of 30-Jul-2021


Attractive

Economic Profit Analysis

ValueCreation™ EXCELLENT Adjusted Return on Invested Capital (ROIC)

ROIC - WACC Spread, 3-year historical average 18.1%ROIC - WACC Spread, 5-year projected average 26.2%These spreads equal the firm's annual average ROIC (excluding goodwill) less its WACC.

ValueTrend™ POSITIVE

Weighted Average Cost of Capital (WACC) The graph above shows the firm's ROIC (excluding goodwill) compared with historical averages and its WACC.

Adjusted ROIC CalculationFiscal Year End: Dec-18 Dec-19 Dec-20

Earnings before InterestOperating Income after Depreciation 1,862 1,946 1,780- Adjusted Taxes (at 24% of EBIT) 447 467 427+ Amortization 143 136 138+ Non-cash Operating Items -245 436 685- Minority Interest 17 26 15Earnings before Interest 1,296 2,025 2,161

Cost of Equity Invested CapitalRisk Free Rate Assumption Inventories 1,783 1,710 1,735Fundamental Beta (ERP multiplier) + Receivables 2,845 2,756 2,726Estimated Equity Risk Premium + Current Deferred Income Taxes 0 0 0Cost of Equity Assumption + Other Current Assets 370 431 415

+ Property, Plant and Equipment, Net 2,805 2,983 3,127After-tax Cost of Debt + Goodwill, Net (Cost in Excess) 4,070 4,470 5,102Risk Free Rate Assumption + Intangibles 1,972 2,131 2,351Synthetic Credit Spread + Non Current Deferred Income Taxes 229 220 379Cost of Debt Assumption - Accounts Payable 3,623 3,496 3,792Cash Tax Rate Assumption - Other Current Liabilities 0 0 0After-tax Cost of Debt Assumption

Invested Capital, with goodwill 10,451 11,205 12,043Cost of Preferred Stock Invested Capital, without goodwill 6,381 6,735 6,941Preferred DividendsValue of Preferred Stock Return on Invested Capital, with goodwill 12.5% 18.7% 18.6%Cost of Preferred Assumption Return on Invested Capital, without goodwill 20.3% 30.9% 31.6%

In Millions of USD

Weighted Average Cost of Capital (WACC)ERP = Equity Risk Premium

Note: Valuentum may provide an adjusted ROIC measure to better reflect the economic substance of a company's operations, as in the case of companies with negative invested capital.


24.0%5.3%

00

NA

9.5%

0.96.5%

10.2%

4.3%2.67%

7.0%

PPG Industries receives a ValueTrend™ rating of POSITIVE, which is based on thecompany's trailing three-year performance. The firm's ROIC (excluding goodwill)increased to 31.6% last year from its trailing 3-year average of 27.6%. We expect ROIC(excluding goodwill) to be in the ballpark of about 44% by the end of our discreteforecast period, with upside potential to about 56% over that time period.

---------- Actual ----------

4.3%

$158.00 $126.00 - $190.00 LARGE-CAP CORE Materials Mining & Chemicals

The best measure of a firm's ability to create value for shareholders is expressed bycomparing its return on invested capital (ROIC) with its weighted average cost ofcapital (WACC). The gap or difference between ROIC and WACC is called the firm'seconomic profit spread. PPG Industries' 3-year historical return on invested capital(without goodwill) is 27.6%, which is above the estimate of its cost of capital of 9.5%.As such, we assign the firm a ValueCreation™ rating of EXCELLENT. In the chart tothe right, we show the probable path of ROIC in the years ahead based on the estimatedvolatility of key drivers behind the measure. The solid grey line reflects the most likelyoutcome, in our opinion, and represents the scenario that results in our fair valueestimate.

PPG Industries PPG FAIRLY VALUED Estimated Fair Value Fair Value Range Investment Style Sector Industry

55.6%

43.9%

20.3%

30.9% 31.6% 32.2%

WACC, 9.5%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

87.1%

12.9%Equity

Debt

Preferred

Capital Structure



Attractive

Growth Analysis

Revenue Growth MODEST Projected Revenue (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year

Revenue3-year Historical

CAGR5-year Projected

CAGRPPG Industries USD 13,834 -2.1% 7.9%

Air Products & Chemical USD 8,856 2.6% 9.1%

BHP Billiton USD 42,931 6.3% 12.9%

DuPont USD 20,397 -31.1% -1.6%

Sherwin-Williams USD 18,362 7.0% 5.4%

Peer Median 4.5% 7.3%

Industry Median 1.3% 6.7%

In the chart above, we show our baseline forecast for revenue as well as potential upside and downside cases.

EBITDA Growth Projected EBITDA (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year

EBITDA3-year Historical

CAGR5-year Projected

CAGRPPG Industries USD 2,289 -3.2% 16.6%



DuPont USD 4,755 -23.1% 5.2%




In the chart above, we show our baseline forecast for EBITDA as well as potential upside and downside cases.

Net Income Growth Projected Net Income (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year Net Income

3-year Historical CAGR

5-year Projected CAGR

PPG Industries USD 1,056 -12.7% 24.0%

Air Products & Chemical USD 1,901 -14.3% 18.7%


DuPont USD -2,902 -226.4% -199.7%


Peer Median -4.8% 15.9%

Industry Median -3.9% 14.1%

In the chart above, we show our baseline forecast for net income as well as potential upside and downside cases.

PPG Industries' EBITDA expansion has trailed both that of its peer group and itsindustry group during the past three years. We expect the firm's EBITDA expansion tooutpace its peer group and industry group during the next five years. Air Products &Chemicals sports the highest expected EBITDA growth rate among peers.

PPG Industries' net income expansion has trailed both that of its peer group and itsindustry group during the past three years. We expect the firm's net income expansionto outpace its peer group and industry group during the next five years. BHP Billitonsports the highest expected net income growth rate among peers.



PPG Industries' revenue expansion has trailed the median of both its peer group and itsindustry group during the past three years. We expect the firm's revenue expansion tooutpace the median of its peer group and industry group during the next five years. Ourgrowth assessment of each firm is based on the firm's 5-year forward revenue CAGR.PPG Industries' future pace of revenue growth is MODEST, in our opinion.


15,374 15,14613,834

21,482

20,24018,999

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2,359 2,457 2,289

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Attractive

Cash Flow and Financial Leverage AnalysisCash Flow Generation STRONG Financial Leverage MEDIUM

The bars above show the firms operating cash flow, capital expenditures, and free cash flow, respectively. The bars above show the firm's annual debt-to-EBITDA. The red line shows the firm's normalized measure.

Cash Flow from Operations Projected Operating Cash Flow (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year CFO


5-year Projected CAGR

PPG Industries USD 2,130 10.8% 13.2%


BHP Billiton USD 15,706 -2.2% 19.9%

DuPont USD 4,095 -22.2% 1.1%




In the chart above, we show our baseline forecast for CFO as well as potential upside and downside cases.

Free Cash Flow (CFO-capital expenditures) Projected Free Cash Flow (in millions of USD) Source: Company Filings, Valuentum Projections

Last Fiscal Year FCF


5-year Projected CAGR Source: Company Filings, Valuentum Projections

PPG Industries USD 1,826 14.8% 13.1%

Air Products & Chemical USD 756 -20.2% 28.6%

BHP Billiton USD 8,066 -12.7% 24.3%

DuPont USD 2,901 -16.6% 3.2%


Peer Median -14.7% 16.7%


In the chart above, we show our baseline forecast for free cash flow as well as potential upside and downside cases.

PPG Industries' cash flow from operations expansion has been greater than that of itspeer group but has fallen in line with that of its industry group during the past threeyears. We expect the firm's cash flow from operations expansion to outpace its peergroup and industry group during the next five years. BHP Billiton sports the highestexpected cash flow from operations growth rate among peers.

PPG Industries' free cash flow expansion has been greater than that of its peer group buthas fallen in line with that of its industry group during the past three years. We expectthe firm's free cash flow to trail its peer group but outpace that of its industry groupduring the next five years. Air Products & Chemicals sports the highest expected freecash flow growth rate among peers.



Firms that generate a free cash flow margin (free cash flow divided by total revenue)above 5% are usually considered cash cows. PPG Industries' free cash flow margin hasaveraged about 10.4% during the past 3 years. As such, we think the firm's cash flowgeneration is relatively STRONG. The free cash flow measure shown above is derivedby taking cash flow from operations less capital expenditures and differs fromenterprise free cash flow (FCFF), which we use in deriving our fair value estimate forthe company. For more information on the differences between these two measures,please visit our website at Valuentum.com. At PPG Industries, cash flow fromoperations increased about 45% from levels registered two years ago, while capitalexpenditures fell about 26% over the same time period.

Firms that exhibit high leverage tend to be more risky than firms with relatively lowdebt loads, all else equal. We measure financial leverage by taking a firm's currenttotal debt load and dividing it by the firm's trailing average 3-year annual EBITDA.Firms that are over 3 for this metric, we rate as having high leverage. Companies thathave less than 1.5 turns of leverage (or a measure below 1.5), we rate as having lowleverage. PPG Industries' normalized debt-to-EBITDA measure of about 2.43 puts itin the MEDIUM camp.


1,467

2,080 2,130

411 413 304

1,056

1,6671,826

Dec-18 Dec-19 Dec-20

Cash from Operations Capital Expenditures Free Cash Flow PPG Industries -normalized

leverage, 2.43

0

0.5

1

1.5

2

2.5

3

3.5

12/31/2018 12/31/2019 12/31/2020

PPG Industries- annual leverage PPG Industries - normalized leverageMedium Threshold HighThreshold

1,467

2,080 2,130

5,334

3,951

2,568

0

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Attractive

Valuation Analysis

Valuation Assumptions Valuation BreakdownIn Millions of USD (except for per share items)

Revenue CAGR %Avg. EBIT Margin %Avg. Cash Tax Rate %Earnings Before Interest CAGR %Earnings Per Share CAGR %Free Cash Flow to the Firm CAGR %Earnings before interest = Net operating profits less adjusted taxes

Phase II --> III FCFF CAGR % 2.2% (II) 3% (III)Cost of Equity %After-tax Cost of Debt %Discount Rate (WACC) %Synthetic credit spread = 2.667%

Phase I Present ValuePhase II Present ValuePhase III Present ValueTotal Firm Value

Net Balance Sheet Impact

Total Equity ValueDiluted Shares OutstandingFair Value per Share

DCF Valuation Summary Enterprise Free Cash FlowFiscal Year End: 12/31/2018 12/31/2019 12/31/2020

1,296 2,025 2,161354 375 371411 413 304152 -35 -301

- Acquisitions 378 643 1,169709 1,379 1,360

In Millions of USD

Source: Company Filings, Valuentum Projections

Company NameValuentum Buying

Index™Forward Price-to-

Earnings

Price/Earnings-to-Growth (PEG), 5-

yearEV/Est. Normal

EBITDA

5-year Forward Earnings per Share CAGR

3-year Hist Avg ROIC, without

goodwillDividend Yield

%

Stock Price / Fair Value Estimate

PPG Industries 4 20.1 1.4 10.6 26.7% 27.6% 1.4% 103.5%

Air Products & Chemical 3 31.8 1.9 11.1 18.0% 15.1% 1.8% 115.0%

BHP Billiton 7 21.9 1.9 9.8 25.9% 14.5% 4.0% 119.0%

DuPont 3 19.8 NMF 8.6 -199.7% 8.2% 1.6% 107.2%

Sherwin-Williams 6 30.5 3.0 17.8 13.2% 37.1% 0.8% 118.8%

Peer Median 4.5 26.2 1.9 10.5 15.6% 14.8% 1.7% 116.9%

Industry Median 5.0 20.8 2.3 10.4 15.5% 15.1% 1.4% 110.6%

View back of report for a full list of industry constituents covered by Valuentum. VBI: Valuentum's ranking for the attractiveness of this investment at the date of the report.


25.1 20.9

19.5 14.1

18.4 12.2

20.9 15.8

17.6 12.3

18.1 9.0

Company Metrics versus Peer and Industry Medians

P/E on Est. Normal Diluted EPS Forward EV/EBITDA

14.8 13.2

In addition to the firm's cap structure, the net balance sheet impact considers the funded status of the firm's pension (-825). In Millions of USD

---------- Actual ----------

We think PPG Industries is worth $158 per share with a fair value range of $126.00 -$190.00. The margin of safety around our fair value estimate is driven by the firm'sLOW ValueRisk™ rating, which is derived from an evaluation of the historicalvolatility of key valuation drivers and a future assessment of them. Our near-termoperating forecasts, including revenue and earnings, do not differ much from consensusestimates or management guidance. Our model reflects a compound annual revenuegrowth rate of 7.9% during the next five years, a pace that is higher than the firm's 3-year historical compound annual growth rate of -2.1%. Our model reflects a 5-yearprojected average operating margin of 18%, which is above PPG Industries's trailing 3-year average. Beyond year 5, we assume free cash flow will grow at an annual rate of2.2% for the next 15 years and 3% in perpetuity. For PPG Industries, we use a 9.5%weighted average cost of capital to discount future free cash flows.

Earnings before Interest+ Depreciation - Capital Expenditures - Change in Working Capital

Enterprise Free Cash Flow (FCFF)

Our future forecasts for key valuation drivers result in a future free enterprise cashflow stream. Above, we show how we calculate enterprise free cash flow and thehistorical performance of the metric for PPG Industries. Over the next five years, weexpect the firm's enterprise free cash flow to expand at about a 21% compoundannual growth rate. During years 6 through 20, we expect the measure to grow at a2.2% rate. Beyond year 20 (in perpetuity), we grow the firm's free cash flow atinflation (3%).

-4,652

37,677237.9

$158.00

19,62612,23442,329

9.5%Results10,469

10.4%26.7%20.6%

Long-term Projections

10.2%5.3%


5-year Projections In the chart below, we show the build up to our estimate of total enterprise value forPPG Industries and the break down to the firm's total equity value, which we estimateto be about 37.68USD billion. The present value of the enterprise free cash flowsgenerated during each phase of our model and the net balance sheet impact, whichconsiders the firm's pension, is displayed. We divide total equity value by dilutedshares outstanding to arrive at our $158 per share fair value estimate.

7.9%18.0%24.0%


10,469

19,626

12,2344,652

37,677

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Yr 1-5 Yr 6-20 Perpetuity Net Balance SheetImpact

Equity Value



Attractive

Margin of Safety Analysis

Range of Potential Outcomes ValueRisk™ LOW

Revenue Volatility 4.9%Gross Margin Volatility 3.6%Earnings (EBI) Volatility 21.4%Cash Flow (FCFF) Volatility 23.2%Fair Value Range 20.0%The Fair Value Range sets the premium or discount on our estimate of the firm's fair value.

Upside and Downside ProbabilitiesProbability (fair value < $0) Less than 0.1%Probability (fair value > 2x current share price) 0.00%

Future Path of Fair Value

The graph above shows the expected future fair value of the firm's shares relative to its current stock price.

Our discounted cash flow process values each firm on the basis of the present value ofall future free cash flows. Although we estimate the firm's fair value at about $158 pershare, every company has a range of probable fair values that's created by theuncertainty of key valuation drivers (like future revenue or earnings, for example). After all, if the future were known with certainty, we wouldn't see much volatility in themarkets as stocks would trade precisely at their known fair values. Our ValueRisk™rating sets the margin of safety or the fair value range we assign to each stock. In thegraph above, we show this probable range of fair values for PPG Industries. We thinkthe firm is attractive below $126 per share (the green line), but quite expensive above$190 per share (the red line). The prices that fall along the yellow line, which includesour fair value estimate, represent a reasonable valuation for the firm, in our opinion.

We strive to answer a few questions that investors often ask: 1) What are the chancesof a total loss of investment in this company? and 2) What is the chance that thecompany is really worth twice what I paid for it? The probability (fair value < 0)strives to answer the first question. It indicates the chance that the firm mayencounter insolvency based on the characteristics of its cash flow stream, capitalstructure, and risk profile. The probability (fair value > 2x current share price) strivesto answer the second question. It is our best estimate of whether investors areparticipating in a half-off sale by buying the company's shares at current prices.

We estimate PPG Industries' fair value at this point in time to be about $158 per share.As time passes, however, companies generate cash flow and pay out cash toshareholders in the form of dividends. The chart to the right compares the firm's currentshare price with the path of PPG Industries' expected equity value per share over thenext three years, assuming our long-term projections prove accurate. The range betweenthe resulting downside fair value and upside fair value in Year 3 represents our bestestimate of the value of the firm's shares three years hence. This range of potentialoutcomes is also subject to change over time, should our views on the firm's future cashflow potential change. The expected fair value of $203 per share in Year 3 representsour existing fair value per share of $158 increased at an annual rate of the firm's cost ofequity less its dividend yield. The upside and downside ranges are derived in the sameway, but from the upper and lower bounds of our fair value estimate range.



PPG Industries receives a ValueRisk™ rating of LOW based of the historicalvolatility of key drivers of economic value creation. The fair value range sets themargin of safety around our fair value estimate of the firm's shares.


$126

$158

$190

0 50 100 150 200 250 300 350

$244

$203Current Share Price, $164

$162

$0

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Current Share Price Yr 1 Fair Value Yr 2 Fair Value Yr 3 Fair Value



Attractive

Technical Analysis

Technical Evaluation BEARISH Money Flow Index (MFI) NEUTRAL

30-week Price and Volume Chart (weekly)Relative Price Strength WEAK

5-week Company Performance -3.8%5-week Market Benchmark Performance 2.6%5-week Relative Performance vs. Market Benchmark -6.5%13-week Company Performance -9.4%13-week Market Benchmark Performance 7.5%13-week Relative Performance vs. Market Benchmark -16.9%30-week Company Performance 11.3%30-week Market Benchmark Performance 17.5%30-week Relative Performance vs. Market Benchmark -6.2%

Upside/Downside Volume BEARISH Timeliness Matrix™ Equity Valuation

Relative Strength

Firms that are undervalued and currently showing near-term pricing strength score near the top right of the matrix.


Weak 1Companies that are undervalued and showing near-term relative price strength couldrepresent timely buys, as the stock may be attractive to both value and momentuminvestors. A cross section of the firm's equity valuation and its relative share pricestrength is shown in the matrix above. We tend to prefer undervalued stocks that have strong pricing momentum, also called Valuentum stocks.

The level and trend of the Upside/Downside (U/D) volume ratio reveals whetherinstitutional participation has been bullish or bearish as of late. PPG Industries' U/Dvolume ratio of 0.7 is not only less than 1 but also is lower than its trailing average,indicating BEARISH institutional interest during the past several weeks.

Strong

Neutral

The firm's near-term moving average (5-week, grey line) and medium-term movingaverage (13-week, red line) are shown in the chart above. Typically, when a shorter-term moving average crosses a medium- or longer-term moving average from below, itrepresents a bullish signal. If the short-term moving average crosses from above, tradersoften view this as bearish. PPG Industries' 5-week moving average is below its 13-weekmeasure, indicating a BEARISH trend. The firm's 30-week uptrend could bechallenged.

The Money Flow Index (MFI) is an oscillator that uses price and volume to measurebuying and selling pressure. Chartists often look for overbought (above 80) andoversold (below 20) levels to warn of unsustainable near-term price extremes. PPGIndustries' MFI of 56 is neutral, suggesting the firm's stock is neither overbought noroversold at this time. However, a score over 50 tends to favor bulls. The MFI can alsobe used to gauge the strength or weakness of a firm's price trend. In PPG Industries'case, its stock price and money flow neither reveals a bullish nor bearish divergence,further supporting our neutral view on its money flow action.

A firm's relative price strength can be assessed over any number of time horizons. Weshow the firm's performance over the past 5 weeks, 13 weeks, and 30 weeks below.In arriving at our relative strength rating for each company, we assess the past 13weeks, which includes the market's reaction to the firm's most recently reportedquarter, where applicable, and other more recent economic events. During the past 13weeks, PPG Industries' shares returned -9.4%, while the market benchmark returned7.5%. We think PPG Industries' 13-week relative price performance is WEAK.

In the chart above, we pinpoint the heaviest accumulation or distribution week of thefirm, determined by the week with the highest trading volume during the past 30 weeks.A heavy accumulation (buying) or distribution (selling) week often determines thefuture near-term direction of the firm's share price, as money managers continue tomove in or out of the stock in the days and weeks ahead driving the stock up or down,respectively. For PPG Industries, the week with the highest trading volume out of thelast 30 weeks was a week of heavy buying, or accumulation (green bar). Such marketactivity could indicate a reversal of a downtrend or further confirmation of the firm'suptrend.

Overvalued Fairly Valued Undervalued

Estimated Fair Value Fair Value Range Investment Style Sector Industry $158.00 $126.00 - $190.00 LARGE-CAP CORE Materials Mining & Chemicals

PPG Industries PPG FAIRLY VALUED

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5-week Moving Average

13-week Moving Average Stock Price

129

139

149

159

169

179

189 Overbought Line

Oversold Line

6256

0102030405060708090

1.2

0.7

Average, 1.2

0.00.20.40.60.81.01.21.41.61.82.0

- 10-week Moving Average



Attractive

Pro Forma Income Statement -------------------- Historical --------------------

In Millions of USD (except for per share items)Dec-18 Dec-20

Total Revenue 15,374 13,834

Cost of Goods Sold 9,001 7,777

Selling, General and Administrative Expenses 3,573 3,389

Other Operating Expenses 938 888

Operating Income 1,862 1,780

Unusual items 0 0

Operating Income, including unusual items 1,862 1,780

Interest Expense (118) (138)

Other Non-operating Income (51) (280)

Pre-tax Income 1,693 1,362

Income Taxes 353 291

Income after tax 1,340 1,071

Minority Interest and Equity Income (17) (15)

Net Income, excluding extra items 1,323 1,056

Income Available to Common, excluding extra items 1,323 1,056

Diluted Earnings per Share, excluding extra items 5.39 4.44

Diluted Weighted Shares Outstanding 245.4 237.9

Source: Company Filings, Xignite, Valuentum Projections

Note: Pro forma data in discounted cash-flow valuation may reflect significant adjustments from GAAP accounting data, including cash (not effective) tax rates and other analytical adjustments on a backward-looking and forward-looking basis. No individual data, by itself, found in this report should be used to make any investment decision.

238.2 233.1 228.5


5.22 8.15 9.06

1,243 1,900 2,070

1,243 1,900 2,070

(26) (15) (15)

1,269 1,915 2,085

392 605 658

1,661 2,520 2,743

(153) 0 0

(132) (138) (138)

0 0 0

1,946 2,658 2,881

1,946 2,658 2,881

943 1,038 1,105

8,653 9,094 9,674

3,604 3,963 4,216

15,146 16,753 17,875



---------- Projected ----------




Attractive

Pro Forma Balance Sheet -------------------- Historical --------------------


AssetsTotal Cash (including marketable securities) 963 1,922Inventory 1,783 1,735Accounts Receivable 2,845 2,726Other Current Assets 370 415Total Current Assets 5,961 6,798

Gross Fixed Assets 6,633 7,476(Accumulated Depreciation) (3,828) (4,349)Net Property, Plant, and Equipment 2,805 3,127

Goodwill, Net 4,070 5,102Intangibles, Net 1,972 2,351Other Long-term Assets 1,207 2,178Total Assets 16,015 19,556

LiabilitiesAccounts Payable 3,623 3,792Other Current Liabilities 99 461Current Portion of Long-term Debt 651 578Total Current Liabilities 4,373 4,831

Long-term Debt 4,365 5,171Other Long-term Liabilities 2,647 3,865Total Liabilities 11,385 13,867

Preferred Stock 0 0

Shareholders' EquityCommon Stock and Additional Paid in Capital 1,757 1,977Retained Earnings 18,131 19,469Other Equity (15,258) (15,757)Total Shareholders' Equity 4,630 5,689

Total Liabilities and Shareholders' Equity 16,015 19,556




17,708 21,002 22,170

(15,541) (16,360) (16,942)5,284 6,451 7,371

1,919 1,977 1,97718,906 20,834 22,337

0 0 0

12,424 14,551 14,799

4,539 5,171 5,1713,510 3,865 3,865

4,375 5,515 5,763

366 413 508513 578 578

3,496 4,525 4,677

17,708 21,002 22,170

2,131 2,213 2,0751,954 2,178 2,178

2,983 3,119 3,124

4,470 5,102 5,102

7,065 7,917 8,402(4,082) (4,798) (5,278)

431 415 4156,170 8,391 9,691

1,710 2,015 2,1282,756 3,290 3,498

1,273 2,672 3,650

---------- Projected ----------


Estimated Fair Value Fair Value Range Investment Style Sector Industry $158.00 $126.00 - $190.00 LARGE-CAP CORE Materials Mining & Chemicals

PPG Industries PPG FAIRLY VALUED



Attractive

Pro Forma Cash Flow Statement -------------------- Historical --------------------


Cash from OperationsNet Income 1,358 1,074Depreciation and Amortization 354 371Deferred Income Taxes 0 0Operating Gains Or Losses (245) 685Changes in Working Capital 0 0

Cash Flow from Operations 1,467 2,130

Cash from InvestingPurchase of Property, Plant, Equipment (411) (304)Other Investing Cash Flows (353) (1,143)Cash Flow from Investing (764) (1,447)

Cash from FinancingIssuance (Retirement) of Stock (1,706) 54Issuance (Retirement) of Debt 983 452Dividends Paid (453) (496)Other Financing Cash Flows (29) (89)Cash Flow from Financing (1,205) (79)

Foreign Exchange (32) 6

Net Change in Cash (534) 610




1 0 0

314 750 979

(758) (1,328) (1,345)

(468) (550) (582)(67) 0 0

(264) (778) (762)41 0 0

(1,009) (441) (485)

(413) (441) (485)(596) 0 0

2,080 2,519 2,808

436 175 1800 (159) (74)

375 587 6170 0 0

1,269 1,915 2,085



---------- Projected ----------




Attractive

Mining & ChemicalsMining & Chemicals FAIRLY VALUED

Company Name TickerMarket Cap (USD-

mil) DCF Valuation ValueCreation™ ValueRisk™ ValueTrend™ Technicals Relative Strength

Air Products & Chemicals APD 64,696 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BEARISH WEAK

Albemarle ALB 22,007 FAIRLY VALUED POOR HIGH NEGATIVE BULLISH STRONG

Alcoa AA 7,468 OVERVALUED POOR HIGH NEGATIVE BULLISH WEAK

AptarGroup ATR 8,593 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE NEUTRAL WEAK

BHP Billiton BHP 199,110 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BULLISH WEAK

Carlisle Companies CSL 11,123 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BULLISH WEAK

Compass Minerals CMP 2,326 FAIRLY VALUED POOR MEDIUM NEGATIVE BULLISH WEAK

DuPont DD 55,199 FAIRLY VALUED POOR LOW POSITIVE BEARISH WEAK

Eastman Chemical EMN 15,386 FAIRLY VALUED GOOD LOW POSITIVE BEARISH WEAK

Ecolab ECL 64,107 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BULLISH WEAK

Freeport McMoRan FCX 55,664 FAIRLY VALUED POOR VERY HIGH POSITIVE BEARISH WEAK

Graco GGG 13,430 FAIRLY VALUED EXCELLENT MEDIUM NEGATIVE BULLISH WEAK

H.B. Fuller FUL 3,394 FAIRLY VALUED GOOD LOW POSITIVE BEARISH WEAK

Kaiser Aluminum KALU 1,936 FAIRLY VALUED EXCELLENT LOW POSITIVE BEARISH WEAK

LyondellBasell LYB 33,176 FAIRLY VALUED EXCELLENT LOW NEGATIVE BEARISH WEAK

Martin Marietta MLM 22,670 FAIRLY VALUED POOR MEDIUM POSITIVE BULLISH WEAK

Newmont Mining NEM 50,886 FAIRLY VALUED POOR HIGH POSITIVE BEARISH WEAK

Nucor NUE 31,546 FAIRLY VALUED EXCELLENT HIGH POSITIVE VERY BULLISH WEAK

PPG Industries PPG 38,901 FAIRLY VALUED EXCELLENT LOW POSITIVE BEARISH WEAK

Rio Tinto RIO 140,564 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE VERY BULLISH WEAK

Sherwin-Williams SHW 80,274 FAIRLY VALUED EXCELLENT MEDIUM POSITIVE BULLISH WEAK

Sonoco SON 6,456 FAIRLY VALUED EXCELLENT LOW POSITIVE BEARISH WEAK

Vale VALE 107,824 FAIRLY VALUED EXCELLENT VERY HIGH POSITIVE BEARISH WEAK

Vulcan Materials VMC 23,983 FAIRLY VALUED GOOD MEDIUM POSITIVE VERY BULLISH WEAK

Wheaton Precious Metals WPM 20,771 FAIRLY VALUED POOR MEDIUM POSITIVE VERY BULLISH WEAK


LARGE-CAP VALUE NEUTRAL

LARGE-CAP CORE NEUTRAL

LARGE-CAP GROWTH UNATTRACTIVE


LARGE-CAP CORE UNATTRACTIVE

MID-CAP CORE ATTRACTIVE

LARGE-CAP VALUE NEUTRAL

LARGE-CAP GROWTH NEUTRAL

LARGE-CAP CORE ATTRACTIVE

SMALL-CAP GROWTH ATTRACTIVE



LARGE-CAP GROWTH ATTRACTIVE


MID-CAP CORE NEUTRAL




LARGE-CAP GROWTH ATTRACTIVE


MID-CAP CORE UNATTRACTIVE


MID-CAP CORE NEUTRAL

MID-CAP VALUE NEUTRAL

The above bar chart reveals the price/fair value of the company, its peers, and the industry as a whole.Shaded blue denotes that the firm has earned the highest rating for that respective category.Investment Style Relative Valuation

LARGE-CAP GROWTH NEUTRAL


We think the Mining & Chemicals industry is fairly valued at this time. The industry'smarket cap is trading between 80% and 120% of our estimate of its fair value based onour DCF process. Although we use a firm-specific ValueRisk™ measure to determinewhether a firm is undervalued or overvalued based on our DCF process, we consider anindustry to be undervalued if it is trading below 80% of our estimate of its fair valueand overvalued if it is trading at over 120% of our estimate of its fair value. We thinkthese fair value ranges are appropriate given the diversification benefits of holding abasket of stocks. Although there may be individual opportunities within the Mining &Chemicals industry, we don't find the industry as a whole attractive based solely onvaluation.


103.5%

116.9%

110.6%

95%

100%

105%

110%

115%

120%

PPG Industries Peer Median Mining & Chemicals

Valuentum's Full Page Stock Report


BA

G

I

N

C

J

D

M

H

E

L

K

A DCF ValuationShows whether the firm is undervalued, fairly valued, or overvalued based on our DCF process and by how much.

B Valuentum Buying Index (VBI)Provides insight into the timeliness of an investment opportunity. We rank firms from 1 to 10 based on rigorous fiancial, valuation, and technical analysis. A 10 represents one of our top picks.

C Valuentum Value Rating (VVR) Indicates whether we think a firm is undervalued, fairly valued, or overvalued on the basis of our DCF process.

D Investment ConsiderationsEvaluates firms on 12 different measures, from the firm's growth and cash flow generation to the stock's money flow index and upside/downside volume. We reveal technical support and resistance levels.

E 30-week Price and Volume ActionDisplays the last accumulation or distribution week of the stock and historical price and volume action.

G Company VitalsShows sector,industry and other relevant company information.

H Business QualitySummary of the firm's ability to create value for shareholders compared wth the underlying risk of its operations.

I Normalized EPS and EBITDAEstimation of the firm's normalized earnings measures and the corresponding valuation mutliples.

J Investment HighlightsOur opinion of the company, including analysis of its financial and technical strengths and weaknesses.

K Relative ValuationComparison of the firm's PE, PEG, and Price/FV ratios versus peers.

L Returns Summary3-year averages of the firm's key return measures, including return on invested capital, with and without goodwill.

M Leverage, Coverage, and LiquidityA snapshot of the company's financial health.

N Financial SummaryA summary of the proforma financial statements found in the extended report.

VBI Score Action10 Top Pick9 We'd Consider Buying

6 to 8 Constructive (add/trim)3 to 6 Less Exciting (add/trim)1 to 2 We'd Consider Selling

UNDERVALUED

FAIRLY VALUED

OVERVALUED

• Revenue Volatility • Margin Volatility • Earnings Volatility • Cash Flow Volatility

About Valuentum

@Valuentum, we strive to stand out from the crowd. Mostinvestment research publishers fall into a few camps,whether it be value, growth, income, momentum, chartistor some variant of the aforementioned. We think each inits own right holds merit, but we think the combination ofthese approaches can be even more powerful. After all,stock price movements aren’t just driven by investors ofthe value or growth variety, but by all market participants.Therefore, we look at stocks from a variety of investmentperspectives in order to better understand and identifyideas. We want to provide relevant information.

The core of our process is grounded in rigorous discountedcash flow analysis and incorporates the concept of amargin of safety. We offer a fair value estimate for eachcompany and provide a relative valuation assessment inthe context of a company’s industry and closest peers. Across section of our ValueCreation™ and ValueRisk™ratings provides a financial assessment of a company’sbusiness quality, while our ValueTrend™ rating offersinsight into the trajectory of a firm’s economic profitcreation. The Economic Castle rating measures themagnitude of future economic value generation, and theDividend Cushion ratio assesses the financial capacity of acompany to keep raising its dividend.

Our analysis doesn’t stop there. We also offer a technicalevaluation of the stock as well as other momentumindicators. We not only want to reveal to readers whichfirms may be undervalued, in our view, but we also wantto provide readers with information to help them assessentry and exit points. Most research publishers focus onarriving at a target price or fair value estimate, but mayfall short of providing a technical assessment to bolsterbuy and sell disciplines. We strive to go the distance andprovide readers with answers--not half the story.

An explanation of our approach would not be complete ifwe didn’t describe our ideal stock idea. We’re lookingfor companies that are undervalued--both on a DCF basisand versus peers--have strong growth potential, have asolid track record of creating economic profits forshareholders with reasonable risk, are strong cash flowgenerators, have manageable financial leverage, and arecurrently showing bullish technical and momentumindicators. For dividend growth ideas, we look forcompanies that have both the capacity and willingness tokeep raising the dividend.

Can such stock ideas exist? Subscribe to Valuentum toreceive our best investment ideas and analysis onhundreds of stocks, dividends, ETFs and more.

Historical firm-specific financial data generates our ValueCreation™, ValueRisk™, and ValueTrend™ ratings. The data provides the basis for our financial forecasts. Full annual forecasts of income statement, balance sheet, and cash flow statement items. Firm-specific cost of equity, cost of debt, weighted average cost of capital, and long-term growth and profitability measures estimated.

A complete three-stage free cash flow to the firm valuation model generates an estimate of the firm's equity value per share based on estimated future free cash flows.The volatility of key valuation drivers are estimated and a margin of safety is determined.

The firm's stock price is compared to the suggested margin of safety. If a firm's stock price falls below the lower bound of our estimated fair value range, it receives Valuentum's highest Value Rating.


Financial Forecasts

Financial Statement Analysis

Discounted Cash Flow Valuation

ModelValueRisk™

Rating

Valuentum Value Rating (VVR)

VBI Score Action10 Top Pick9 We'd Consider Buying

6 to 8 Constructive (add/trim)3 to 6 Less Exciting (add/trim)1 to 2 We'd Consider Selling

Methodology for Picking Stocks - Valuentum Buying Index™ (VBI)

@ Valuentum, we like to look at companies from anumber of different perspectives. The Valuentum BuyingIndex (VBI) combines rigorous financial and valuationanalysis with an evaluation of a stock's technicals to derivea rating between 1 and 10 for each company. The VBIplaces considerable emphasis on a company's discountedcash-flow (DCF) valuation, its relative valuation versuspeers (both forward PE and PEG ratios), and its technicalsin order to help readers assess entry and exit points on themost interesting ideas.

Let's follow the red line on the flow chart below to seehow a company can score a 10, the best mark on the index(a "Top Pick"). First, the company would need to be'undervalued' on a DCF basis and 'attractive' on a relativevalue basis. The stock would also have to be exhibiting

The information contained in this report is not represented or warranted to be accurate, correct, complete, or timely. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

'bullish' technicals. The firm would need aValueCreation™ rating of 'good' or 'excellent', exhibit'high' or 'aggressive' growth prospects, and generate atleast a 'medium' or 'neutral' assessment for cash flowgeneration, financial leverage, and relative price strength.

This is a tall order for any company. Stocks that don'tmake the cut for a 10 are ranked accordingly, with theleast attractive stocks, in our opinion, garnering a ratingof 1 ("We'd sell"). Most of our coverage universeregisters ratings between 3 and 7, but at any given timethere could be large number of companies garneringeither very high or very low scores, especially at marketlows or tops, respectively.

The Best Ideas Newsletter portfolio puts the VBI intopractice.

DCF FairlyValued

DCF Undervalued

Relative ValueUnattractive/Neutral

Relative Value Attractive

Relative ValueUnattractive/Neutral


Technicals Bearish: 1

Technicals Neutral: 2

TechnicalsBullish: 4

Technicals Bullish: 7

TechnicalsBearish: 6

Technicals >= BullishValueCreation(TM) >= GoodGrowth >= HighCash Flow Generation >= MediumFinancial Leverage <= MediumRelative Strength >= Neutral

Final Score: 10



TechnicalsBearish: 3

Relative Value Unattractive/Neutral











Initial Index Score

DCF Overvalued

Range of Potential Outcomes. The firm's margin of safety is shown in the graphicof a normal distribution. We consider a firm to be undervalued if its stock price fallsalong the green line and overvalued if the stock price falls along the red line. Weconsider the firm to be fairly valued if its stock price falls along the yellow line.

Return on Invested Capital. At Valuentum, we place considerable emphasis onreturn on invested capital (both with and without goodwill). The measure focuses onthe return (earnings) the company is generating on its operating assets and is superiorto return on equity and return on assets, which can be skewed by a firm's leverage orexcess cash balance, respectively. ValueTrend™. This is a proprietary Valuentum measure. ValueTrend™ indicates the

trajectory of the firm's return on invested capital (ROIC). Firms that earned an ROIClast year that was greater than the 3-year average of the measure earn a POSITIVErating. Firms that earned an ROIC last year that was less than the 3-year average of themeasure earn a NEGATIVE rating.

Technical Evaluation. We evaluate a firm's near-term and medium-term movingaverages and money flow index (MFI) to assign each firm a rating along thefollowing scale: VERY BULLISH, BULLISH, NEUTRAL, BEARISH, and VERYBEARISH.

Cash Flow Generation. Firms' cash flow generation capacity are measured along thescale of STRONG, MEDIUM, and WEAK. A firm with a 3-year historical free cashflow margin (free cash flow divided by sales) greater than 5% receives a STRONGrating, while firms earning less than 1% of sales as free cash flow receive a WEAKrating.

Stock Price Relative Strength. We assess the perfomance of the company's stockduring the past quarter, 13 weeks, relative to an ETF that mirrors the aggregateperformance of constituents of the stock market. Firms are measured along the scaleof STRONG, NEUTRAL, and WEAK. Companies that have outperformed themarket index by more than 2.5% during this 13-week period receive a STRONGrating, while firms that trailed the market index by more than 2.5% during this 13-week period receive a WEAK rating.

Financial Leverage. Based on the firm's normalized debt-to-EBITDA metric, we rank firms on the following scale: LOW, MEDIUM, and HIGH. Companies with a normalized debt-to-EBITDA ratio below 1.5 receive a LOW score, while those with a measure above 3 receive a HIGH score.

Money Flow Index (MFI). The MFI is a technical indicator that measures buyingand selling pressure based on both price and volume. Traders typically use thismeasure to identify potential reversals with overbought and oversold levels. We use a14-week measure to rank firms along the following scale: EXTREMELYOVERBOUGHT (>90), OVERBOUGHT (80-90), NEUTRAL (20-80), OVERSOLD(10-20), EXTREMELY OVERSOLD (0-10).

Upside/Downside Volume. Heavy volume on up days and lower volume on down days suggests that institutions are heavily participating in a stock's upward advance. We use the trailing 14-week average of upside and downside volume to calculate an informative ratio. We rank each firm's U/D volume ratio along the following scale: BULLISH, IMPROVING, DETERIORATING, and BEARISH.

GlossaryEstimated Fair Value. This measure is our opinion of the fair equity value per share ofthe company. If our forecasts prove accurate, which may not always be the case, wemay expect a firm's stock price to converge to this value within the next 3 years.

Investment Style. Valuentum uses its own proprietary stock-classification system.Nano-cap: Less than $50 million; Micro-cap: Between $50 million and $200 million;Small-cap: Between $200 million and $2 billion; Mid-cap: Between $2 billion and$10 billion; Large-cap: Between $10 billion and $200 billion; Mega-cap: Over $200billion. Blend: Firm's that we think are undervalued and exhibit high growthprospects (growth in excess of three times the rate of assumed inflation). Value:Firm's that we believe are undervalued, but do not exhibit high growth prospects.Growth: Firms that are not undervalued, in our opinion, but exhibit high growthprospects. Core: Firms that are neither undervalued nor exhibit high growthprospects.

Fair Value Range. The fair value range represents an upper bound and lower bound,between which we would consider the firm to be fairly valued. The range considers ourestimate of the firm's fair value and the margin of safety suggested by the volatility ofkey valuation drivers, including revenue, gross margin, earnings before interest, andenterprise free cash flow (the determinants behind our ValueRisk™ rating).

DCF Valuation. We opine on the firm's valuation based on our DCF process. Firmsthat are trading with an appropriate discount to our fair value estimate receive anUNDERVALUED rating. Firms that are trading within our fair value range receive aFAIRLY VALUED rating, while firms that are trading above the upper bound of ourfair value range receive an OVERVALUED rating.

Company Vitals. In this section, we list key financial information and the sector andindustry that Valuentum assigns to the stock. The P/E-Growth (5-yr), or PEG ratio,divides the current share price by last year's earnings (EPS) and then divides thatquotient by our estimate of the firm's 5-year EPS growth rate. The estimatednormalized diluted EPS and estimated normalized EBITDA represent the five-yearforward average of these measures used in our discounted cash flow model. The P/Eon estimated normalized EPS divides the current share price by estimated normalizeddiluted EPS. The EV/estimated normalized EBITDA considers the current enterprisevalue of the company and divides it by estimated normalized EBITDA. EV is definedas the firm's market capitalization plus total debt, minority interest, preferred stockless cash and cash equivalents.

Relative Value. We compare the firm's forward price-to earnings (PE) ratio and itsprice/earnings-to-growth (PEG) ratio to that of its peers. If both measures fall below thepeer median, the firm receives an ATTRACTIVE rating. If both are above the peermedian, the firm receives an UNATTRACTIVE rating. Any other combination resultsin a NEUTRAL rating.

ValueCreation™. This is a proprietary Valuentum measure. ValueCreation™indicates the firm's historical track record in creating economic value for shareholders,taking the average difference between ROIC (without goodwill) and the firm'sestimated WACC during the past three years. The firm's performance is measured alongthe scale of EXCELLENT, GOOD, POOR, and VERY POOR. Those firms withEXCELLENT ratings have a demonstrated track record of creating economic value,while those that register a VERY POOR mark have been destroying economic value.

Business Quality Matrix. We compare the firm's ValueCreation™ and ValueRisk™ratings. The box is an easy way for investors to quickly assess the business quality ofa company. Firms that generate economic profits with little operating variabilityscore near the top right of the matrix.

Timeliness Matrix. We compare the company's recent stock performance relative tothe market benchmark with our assessment of its valuation. Firms that areexperiencing near-term stock price outperformance and are undervalued by ourestimate may represent timely buys.

The information contained in this report is not represented or warranted to be accurate, correct, complete, or timely. This report is for informational purposes only and should not be considered a solicitation to buy or sell a security. Before acting on any information in this material, you should consider whether it is suitable for your particular circumstances and, if necessary, seek professional advice. Assumptions, opinions, and estimates are based on our judgment as of the date of the report and are subject to change without notice. Valuentum is not responsible for any errors or omissions or for results obtained from the use of this report. Redistribution is prohibited without written permission. To license Valuentum research, contact us at [email protected].

ValueRisk™. This is a proprietary Valuentum measure. ValueRisk™ indicates thehistorical volatility of key valuation drivers, including revenue, gross margin, earningsbefore interest, and enterprise free cash flow. The standard deviation of each measure iscalculated and scaled against last year's measure to arrive at a percentage deviation foreach item. These percentage deviations are weighted equally to arrive at thecorresponding fair value range for each stock, measured in percentage terms. The firm'sperformance is measured along the scale of LOW, MEDIUM, HIGH, and VERY HIGH.The ValueRisk™ rating for each firm also determines the fundamental beta of eachfirm along the following scale: LOW (0.85), MEDIUM (1), HIGH (1.15), VERY HIGH(1.3).

PPG Rating History Price Fair Value VBI30-Jul-21 $163.52 $158.00 418-Nov-20 $143.10 $123.00 613-Dec-19 $133.42 $115.00 58-Apr-19 $114.90 $101.00 626-Nov-18 $109.33 $99.00 613-Jul-18 $103.99 $101.00 49-Mar-18 $117.65 $105.00 73-Nov-17 $116.53 $105.00 723-Jun-17 $110.68 $101.00 73-Feb-17 $100.94 $101.00 629-Aug-16 $107.04 $100.00 622-Apr-16 $113.19 $106.00 74-Dec-15 $105.96 $104.00 726-Jun-15 $118.01 $113.00 6

The High Yield Dividend Newsletter portfolio, the Best Ideas Newsletter portfolio and Dividend Growth Newsletter portfolio are not real money portfolios. Any performance, including that in the Nelson Exclusive publication, is hypothetical and does not represent actual trading. Past performance is not a guarantee of future results.

Valuentum is an investment research publishing company.

Valuentum has not owned and does not own any shares of stocks mentioned on its website or in this report. President of Investment Research Brian Nelson does not own any shares of stocks mentioned on Valuentum's website or in this report. Majority share owner of Valuentum, Elizabeth Nelson, currently has exposure to HON in her retirement account.

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