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Axalta Coating Systems Ltd.’s (AXTA - Free Report) shares have gained 12.4% in the past three months. The company also outperformed the industry’s rise of 2% and topped the S&P 500’s 11.7% rise over the same period.
Image Source: Zacks Investment Research
Let’s look at the factors driving the stock’s price appreciation.
What’s Driving Axalta Coating?
In the first quarter, Axalta Coating delivered impressive results, registering a 37.1% year-over-year increase in adjusted earnings. Quarterly sales inched up 0.8%, reaching $1.3 billion. Adjusted EBITDA saw a substantial jump to $259 million from $213 million, with an adjusted EBIT margin of 20%, up 340 basis points (bps) from the previous year’s levels.
The Performance Coatings segment maintained steady net sales while its adjusted EBITDA climbed 16% year over year to $196 million, achieving a margin of 23.1%. The Mobility Coatings segment experienced 2% growth in net sales, bolstered by strong volume growth in China. Despite minor headwinds from raw material-indexed contracts, the Light Vehicle's price and product mix remained nearly flat. The segment's adjusted EBITDA soared to $63 million, with an adjusted EBITDA margin of 14.2%, up 410 bps from the previous year’s tally.
Axalta raised its full-year 2024 earnings and free cash flow outlook based on robust first-quarter results and strategic initiatives to boost profits.
AXTA recently completed the acquisition of The CoverFlexx Group from Transtar Holding Company. The acquisition enhances Axalta's Refinish business by incorporating CoverFlexx's extensive range of automotive refinish and aftermarket coatings, including primers, basecoats, clearcoats, and various detailing products. The CoverFlexx Group, which generated $78 million in revenue in 2023, employs over 120 people and operates facilities in Michigan and Ontario.
Axalta outperformed expectations in the first quarter, posting adjusted earnings of 48 cents per share, surpassing the Zacks Consensus Estimate of 40 cents. The company achieved an average trailing four-quarter earnings surprise of approximately 7%.
The Zacks Consensus Estimate for Axalta's 2024 earnings is pegged at $1.98, reflecting year-over-year growth of 26.1%. The consensus estimate for the current year has been revised upward by 6% in the past 60 days, indicating strong growth potential. Earnings are projected to register a 45.7% increase in second-quarter 2024.
Other Stocks to Consider
Axalta currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) , Eldorado Gold Corporation (EGO - Free Report) and Kinross Gold Corporation (KGC - Free Report) . Carpenter Technology and Eldorado Gold sport a Zacks Rank #1 (Strong Buy), and Kinross carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CRS’s current-year earnings is pegged at $4.35, indicating a year-over-year rise of 282%. CRS’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, the average earnings surprise being 15.1%. The company’s shares have soared 98.5% in the past year.
The Zacks Consensus Estimate for EGO’s current-year earnings is pegged at $1.09, indicating a year-over-year rise of 91.2%. EGO’s earnings estimates have gone up 10% in the past 60 days. EGO beat the consensus estimate in each of the last four quarters, the average earnings surprise being 430.7%. The stock has rallied 48.2% in the past year.
The Zacks Consensus Estimate for Kinross's current-year earnings is pegged at 52 cents, indicating a rise of 18.2% from the year-ago levels. KGC beat the consensus in all of the last four quarters, the average earnings surprise being 46%. The stock has rallied nearly 81.3% in the past year.
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Axalta Coating (AXTA) Shares Rise 12% in 3 Months: Here's Why
Axalta Coating Systems Ltd.’s (AXTA - Free Report) shares have gained 12.4% in the past three months. The company also outperformed the industry’s rise of 2% and topped the S&P 500’s 11.7% rise over the same period.
Image Source: Zacks Investment Research
Let’s look at the factors driving the stock’s price appreciation.
What’s Driving Axalta Coating?
In the first quarter, Axalta Coating delivered impressive results, registering a 37.1% year-over-year increase in adjusted earnings. Quarterly sales inched up 0.8%, reaching $1.3 billion. Adjusted EBITDA saw a substantial jump to $259 million from $213 million, with an adjusted EBIT margin of 20%, up 340 basis points (bps) from the previous year’s levels.
The Performance Coatings segment maintained steady net sales while its adjusted EBITDA climbed 16% year over year to $196 million, achieving a margin of 23.1%. The Mobility Coatings segment experienced 2% growth in net sales, bolstered by strong volume growth in China. Despite minor headwinds from raw material-indexed contracts, the Light Vehicle's price and product mix remained nearly flat. The segment's adjusted EBITDA soared to $63 million, with an adjusted EBITDA margin of 14.2%, up 410 bps from the previous year’s tally.
Axalta raised its full-year 2024 earnings and free cash flow outlook based on robust first-quarter results and strategic initiatives to boost profits.
AXTA recently completed the acquisition of The CoverFlexx Group from Transtar Holding Company. The acquisition enhances Axalta's Refinish business by incorporating CoverFlexx's extensive range of automotive refinish and aftermarket coatings, including primers, basecoats, clearcoats, and various detailing products. The CoverFlexx Group, which generated $78 million in revenue in 2023, employs over 120 people and operates facilities in Michigan and Ontario.
Axalta outperformed expectations in the first quarter, posting adjusted earnings of 48 cents per share, surpassing the Zacks Consensus Estimate of 40 cents. The company achieved an average trailing four-quarter earnings surprise of approximately 7%.
The Zacks Consensus Estimate for Axalta's 2024 earnings is pegged at $1.98, reflecting year-over-year growth of 26.1%. The consensus estimate for the current year has been revised upward by 6% in the past 60 days, indicating strong growth potential. Earnings are projected to register a 45.7% increase in second-quarter 2024.
Other Stocks to Consider
Axalta currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) , Eldorado Gold Corporation (EGO - Free Report) and Kinross Gold Corporation (KGC - Free Report) . Carpenter Technology and Eldorado Gold sport a Zacks Rank #1 (Strong Buy), and Kinross carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CRS’s current-year earnings is pegged at $4.35, indicating a year-over-year rise of 282%. CRS’ earnings beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, the average earnings surprise being 15.1%. The company’s shares have soared 98.5% in the past year.
The Zacks Consensus Estimate for EGO’s current-year earnings is pegged at $1.09, indicating a year-over-year rise of 91.2%. EGO’s earnings estimates have gone up 10% in the past 60 days. EGO beat the consensus estimate in each of the last four quarters, the average earnings surprise being 430.7%. The stock has rallied 48.2% in the past year.
The Zacks Consensus Estimate for Kinross's current-year earnings is pegged at 52 cents, indicating a rise of 18.2% from the year-ago levels. KGC beat the consensus in all of the last four quarters, the average earnings surprise being 46%. The stock has rallied nearly 81.3% in the past year.