PPG, RPM upped at Evercore ISI as pricing power, demand dynamics set to align

• PPG Industries (PPG +1.1%) and RPM International (RPM +1%) are upgraded to Outperform from In-Line, while Air Products and Chemicals (APD +1%) and Linde (LIN +1.7%) are downgraded to In-Line from Outperform at Evercore ISI, as the firm shifts preferences among the specialty chemicals names.
• PPG has been challenged by misses vs. guidance in 2021, but Evercore analyst Stephen Richardson likes the benefits of multiple acquisitions executed through the downcycle, which added $1.4B of revenues annually in stronger growth segments.
• With ~40% of PPG's business still affected by COVID-19 after-effects, Richardson sees further opportunity for operating leverage to support margins.
• On Air Products and Linde, Richardson finds their premium valuations are warranted but he expects the stocks will remain range-bound.
• Seeking Alpha contributor Harold Goldmeier sees PPG's profitability and momentum continuing to improve in 2022, according to a bullish analysis newly published on Seeking Alpha.