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Here's Why You Should Add Axalta Coating Stock to Your Portfolio Now
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Axalta Coating Systems Ltd. (AXTA - Free Report) demonstrated impressive stock performance, driven by strong earnings outperformance, upward revisions to earnings guidance and robust performance across its business segments.
AXTA’s Positive Earnings Surprise
AXTA has consistently surpassed the Zacks Consensus Estimate, delivering positive earnings surprises in each of the last four quarters, with an average surprise of 12.6%. This consistency highlights AXTA's ability to outperform expectations.
Strong Growth Prospects for Axalta
The Zacks Consensus Estimate for AXTA's 2024 earnings is pegged at $2.07, suggesting an increase of 31.9% compared with the previous year’s levels. Looking ahead, earnings are forecast to grow by 14% in 2025.
AXTA’s Earnings Estimates Northbound
In the past two months, the Zacks Consensus Estimate for AXTA's 2024 earnings has been revised upward by 4.5%, while the estimate for 2025 has been raised by 4%. This reflects the growing confidence in the company's future prospects.
Axalta Outperforms the Industry
In the past year, Axalta’s shares have rallied 28.5% against the industry’s decline of 10.2%.
Image Source: Zacks Investment Research
What’s Driving Axalta’s Success?
In the second quarter, Axalta reported a remarkable 63% year-over-year increase in adjusted earnings. Quarterly sales rose by 4.4%, reaching $1.35 billion. Adjusted EBITDA surged to $291 million from $227 million, with an adjusted EBITDA margin of 21.5%. This marked a 400-basis point (bps) improvement from the prior year’s tally.
The Performance Coatings segment posted a 4% increase in net sales, with adjusted EBITDA rising 23% year over year to $223 million, yielding a margin of 25%. The Mobility Coatings segment also delivered strong results, with 6% net sales growth and a 47% increase in adjusted EBITDA. The unit achieved a margin of 14.8%, up 440 basis points from the previous year.
Axalta raised its full-year 2024 outlook for adjusted EBITDA, adjusted EPS, and free cash flow, fueled by its strong second-quarter performance, an improved outlook for the remainder of the year and strategic initiatives aimed at enhancing profitability.
Recently, AXTA strengthened its Refinish business by acquiring The CoverFlexx Group from Transtar Holding Company. This acquisition adds a comprehensive range of automotive refinish and aftermarket coatings to Axalta's portfolio, including primers, basecoats, clearcoats and detailing products. CoverFlexx, which generated $78 million in revenues in 2023, employs more than 120 people and operates facilities in Michigan and Ontario.
The Zacks Consensus Estimate for Hawkins’ current fiscal-year earnings is pegged at $4.14, indicating a rise of 15.3% from the year-ago level. The Zacks Consensus Estimate for HWKN’s current fiscal-year earnings has increased 12.8% in the past 60 days.The stock has rallied around 98.5% in the past year.
The Zacks Consensus Estimate for Carpenter Technology’scurrent-year earnings is pegged at $6.06 per share, indicating a rise of 27.9% from the year-ago level. CRS’ earnings beat the consensus estimate in each of the trailing four quarters, the average earnings surprise being 15.9%. The stock has surged nearly 97.2% in the past year.
The Zacks Consensus Estimate for Eldorado Gold’s current year earnings is pegged at $1.35 per share, indicating a year-over-year rise of 136.8%. EGO beat the consensus estimate in each of the trailing four quarters, with the average surprise being 430.3%. The company's shares have surged nearly 75.1% in the past year.
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Here's Why You Should Add Axalta Coating Stock to Your Portfolio Now
Axalta Coating Systems Ltd. (AXTA - Free Report) demonstrated impressive stock performance, driven by strong earnings outperformance, upward revisions to earnings guidance and robust performance across its business segments.
AXTA’s Positive Earnings Surprise
AXTA has consistently surpassed the Zacks Consensus Estimate, delivering positive earnings surprises in each of the last four quarters, with an average surprise of 12.6%. This consistency highlights AXTA's ability to outperform expectations.
Strong Growth Prospects for Axalta
The Zacks Consensus Estimate for AXTA's 2024 earnings is pegged at $2.07, suggesting an increase of 31.9% compared with the previous year’s levels. Looking ahead, earnings are forecast to grow by 14% in 2025.
AXTA’s Earnings Estimates Northbound
In the past two months, the Zacks Consensus Estimate for AXTA's 2024 earnings has been revised upward by 4.5%, while the estimate for 2025 has been raised by 4%. This reflects the growing confidence in the company's future prospects.
Axalta Outperforms the Industry
In the past year, Axalta’s shares have rallied 28.5% against the industry’s decline of 10.2%.
Image Source: Zacks Investment Research
What’s Driving Axalta’s Success?
In the second quarter, Axalta reported a remarkable 63% year-over-year increase in adjusted earnings. Quarterly sales rose by 4.4%, reaching $1.35 billion. Adjusted EBITDA surged to $291 million from $227 million, with an adjusted EBITDA margin of 21.5%. This marked a 400-basis point (bps) improvement from the prior year’s tally.
The Performance Coatings segment posted a 4% increase in net sales, with adjusted EBITDA rising 23% year over year to $223 million, yielding a margin of 25%. The Mobility Coatings segment also delivered strong results, with 6% net sales growth and a 47% increase in adjusted EBITDA. The unit achieved a margin of 14.8%, up 440 basis points from the previous year.
Axalta raised its full-year 2024 outlook for adjusted EBITDA, adjusted EPS, and free cash flow, fueled by its strong second-quarter performance, an improved outlook for the remainder of the year and strategic initiatives aimed at enhancing profitability.
Recently, AXTA strengthened its Refinish business by acquiring The CoverFlexx Group from Transtar Holding Company. This acquisition adds a comprehensive range of automotive refinish and aftermarket coatings to Axalta's portfolio, including primers, basecoats, clearcoats and detailing products. CoverFlexx, which generated $78 million in revenues in 2023, employs more than 120 people and operates facilities in Michigan and Ontario.
Axalta Coating Systems Ltd. Price and Consensus
Axalta Coating Systems Ltd. price-consensus-chart | Axalta Coating Systems Ltd. Quote
AXTA’s Zacks Rank & Other Key Picks
Axalta currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks in the Basic Materials space are Hawkins, Inc.(HWKN - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and Eldorado Gold Corporation (EGO - Free Report) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Hawkins’ current fiscal-year earnings is pegged at $4.14, indicating a rise of 15.3% from the year-ago level. The Zacks Consensus Estimate for HWKN’s current fiscal-year earnings has increased 12.8% in the past 60 days.The stock has rallied around 98.5% in the past year.
The Zacks Consensus Estimate for Carpenter Technology’scurrent-year earnings is pegged at $6.06 per share, indicating a rise of 27.9% from the year-ago level. CRS’ earnings beat the consensus estimate in each of the trailing four quarters, the average earnings surprise being 15.9%. The stock has surged nearly 97.2% in the past year.
The Zacks Consensus Estimate for Eldorado Gold’s current year earnings is pegged at $1.35 per share, indicating a year-over-year rise of 136.8%. EGO beat the consensus estimate in each of the trailing four quarters, with the average surprise being 430.3%. The company's shares have surged nearly 75.1% in the past year.