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Here's Why You Should Buy Axalta Coating (AXTA) Stock Now
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Axalta Coating Systems Ltd.’s (AXTA - Free Report) stock looks promising at the moment. It posted robust first-quarter earnings that exceeded expectations.
Presenting a lucrative investment opportunity with strong growth prospects, AXTA sports a Zacks Rank #1 (Strong Buy).
Earnings Outperformance
In the first quarter, Axalta Coating outperformed expectations, posting adjusted earnings of 48 cents per share, surpassing the Zacks Consensus Estimate of 40 cents. It pulled off a trailing four-quarter earnings surprise of around 7%, on average.
Robust Growth Prospects
The Zacks Consensus Estimate for AXTA's 2024 earnings is pegged at $1.99, indicating year-over-year growth of 26.8%. The consensus estimate for the current year experienced an upward revision of 6% in the past 60 days, underlining healthy growth potential. Earnings are expected to register a 45.7% rally in second-quarter 2024.
An Outperformer
AXTA’s shares are up 3.7% in a year against the industry’s fall of 14% in the same period.
In the first quarter, Axalta Coating reported robust performance with a 37.1% year-over-year increase in adjusted earnings and a 0.8% year-over-year growth in sales, reaching $1.3 billion. Adjusted EBITDA significantly rose to $259 million from $213 million, with an adjusted EBIT margin of 20%, up by 340 basis points (bps) from the previous year’s tally.
The Performance Coatings segment saw net sales remain flat, while its adjusted EBITDA increased 16% year over year to $196 million, achieving a margin of 23.1%. The Mobility Coatings segment recorded 2% growth in net sales, driven by strong volume growth in China. Despite modest headwinds from raw material indexed contracts, Light Vehicle's price and product mix remained nearly flat. The segment's adjusted EBITDA surged to $63 million, with an adjusted EBITDA margin of 14.2%, up 410 bps from the previous year’s figure.
Axalta raised its full-year 2024 earnings and free cash flow outlook based on strong first-quarter results and strategic actions to drive earnings.
In addition to these strong financial results, Axalta announced an agreement to acquire The CoverFlexx Group from Transtar Holding Company for an initial cash payment of $285 million, with an additional $10-million earnout contingent on the business's 2024 performance. The acquisition, expected to close in the third-quarter pending regulatory approval, will enhance 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 revenues in 2023, employs over 120 people and operates facilities in Michigan and Ontario.
The Zacks Consensus Estimate for CRS’s current-year earnings is pegged at $4.31, indicating a year-over-year surge of 278%. 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 92.5% in the past year.
ATI’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 8.34%, on average. The stock has rallied 30.9% in the past year.
The Zacks Consensus Estimate for Ecolab's current-year earnings is pegged at $6.59, indicating a rise of 26.5% from the year-ago levels. ECL beat the consensus estimate in each of the last four quarters, the average earnings surprise being 1.3%. The stock has rallied nearly 30.3% in the past year.
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Here's Why You Should Buy Axalta Coating (AXTA) Stock Now
Axalta Coating Systems Ltd.’s (AXTA - Free Report) stock looks promising at the moment. It posted robust first-quarter earnings that exceeded expectations.
Presenting a lucrative investment opportunity with strong growth prospects, AXTA sports a Zacks Rank #1 (Strong Buy).
Earnings Outperformance
In the first quarter, Axalta Coating outperformed expectations, posting adjusted earnings of 48 cents per share, surpassing the Zacks Consensus Estimate of 40 cents. It pulled off a trailing four-quarter earnings surprise of around 7%, on average.
Robust Growth Prospects
The Zacks Consensus Estimate for AXTA's 2024 earnings is pegged at $1.99, indicating year-over-year growth of 26.8%. The consensus estimate for the current year experienced an upward revision of 6% in the past 60 days, underlining healthy growth potential. Earnings are expected to register a 45.7% rally in second-quarter 2024.
An Outperformer
AXTA’s shares are up 3.7% in a year against the industry’s fall of 14% in the same period.
Image Source: Zacks Investment Research
Strong Q1 Results & CoverFlexx Acquisition Instill optimism
In the first quarter, Axalta Coating reported robust performance with a 37.1% year-over-year increase in adjusted earnings and a 0.8% year-over-year growth in sales, reaching $1.3 billion. Adjusted EBITDA significantly rose to $259 million from $213 million, with an adjusted EBIT margin of 20%, up by 340 basis points (bps) from the previous year’s tally.
The Performance Coatings segment saw net sales remain flat, while its adjusted EBITDA increased 16% year over year to $196 million, achieving a margin of 23.1%. The Mobility Coatings segment recorded 2% growth in net sales, driven by strong volume growth in China. Despite modest headwinds from raw material indexed contracts, Light Vehicle's price and product mix remained nearly flat. The segment's adjusted EBITDA surged to $63 million, with an adjusted EBITDA margin of 14.2%, up 410 bps from the previous year’s figure.
Axalta raised its full-year 2024 earnings and free cash flow outlook based on strong first-quarter results and strategic actions to drive earnings.
In addition to these strong financial results, Axalta announced an agreement to acquire The CoverFlexx Group from Transtar Holding Company for an initial cash payment of $285 million, with an additional $10-million earnout contingent on the business's 2024 performance. The acquisition, expected to close in the third-quarter pending regulatory approval, will enhance 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 revenues in 2023, employs over 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
Other Key Picks
Some other top-rankedstocks in the Basic Materials space are Carpenter Technology Corporation (CRS - Free Report) , ATI Inc. (ATI - Free Report) and Ecolab Inc. (ECL - Free Report) . Carpenter Technology sports a Zacks Rank #1, and ATI and Ecolab carry a Zacks Rank #2 (Buy). 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 $4.31, indicating a year-over-year surge of 278%. 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 92.5% in the past year.
ATI’s earnings beat the Zacks Consensus Estimate in each of the last four quarters, the average earnings surprise being 8.34%, on average. The stock has rallied 30.9% in the past year.
The Zacks Consensus Estimate for Ecolab's current-year earnings is pegged at $6.59, indicating a rise of 26.5% from the year-ago levels. ECL beat the consensus estimate in each of the last four quarters, the average earnings surprise being 1.3%. The stock has rallied nearly 30.3% in the past year.