Update shared on03 Oct 2025
Fair value Decreased 2.37%Axalta Coating Systems’ average analyst price target has been revised downward from approximately $37.44 to $36.56. Analysts cite increasing headwinds in the repair and refinish sector and expectations for moderated growth ahead.
Analyst Commentary
Recent updates from the Street highlight mixed sentiment regarding Axalta Coating Systems' prospects, as reflected in the downward revision of price targets and a string of rating changes. Analysts point to both opportunities and challenges that could shape the company’s near-term trajectory.
Bullish Takeaways
- Bullish analysts maintain confidence in Axalta’s core strength within specialty and defensive segments, citing its inclusion among top picks in chemicals and packaging.
- Despite reduced price targets, the company's Outperform ratings from select analysts signal an ongoing belief in resilient fundamentals and long-term growth potential.
- A recent market multiple recovery has supported Axalta's valuation, allowing for adjusted expectations that still position the company as a favorable investment within its sector.
- Temporary factors, such as a pause in tariffs, are believed to have pulled forward demand. This may have a positive impact on short-term results even if it leads to future moderation.
Bearish Takeaways
- Bearish analysts point to growing headwinds in the repair and refinish sector, notably from the increasing adoption of smarter and autonomous vehicles. These are expected to significantly reduce accident rates and subsequentially diminish demand for refinish coatings.
- Price targets have been reduced across the board, with some downgrades to Neutral or Market Perform. This reflects concerns about shrinking end-market volumes and limited upside in the near future.
- Persistent pressures from the insurance market and ongoing industry shifts may constrain Axalta's growth and weigh on execution, leading to tempered expectations for sustained outperformance.
- There is a risk that a year-end slowdown in demand, following recent advance purchases, could result in softer financial results and further limit potential upside.
What's in the News
- Axalta Coating Systems provided earnings guidance for the third quarter of 2025, expecting net sales growth in the low single-digit percentage range (Key Developments).
- The company updated its fiscal year 2025 guidance and is projecting net sales between $5,200 million and $5,275 million (Key Developments).
- Between April 1, 2025 and June 30, 2025, Axalta repurchased 2,000,000 shares valued at $65.3 million. This brought the total repurchase to 4,800,000 shares for $165.3 million as part of the buyback program announced in May 2024 (Key Developments).
Valuation Changes
- Consensus Analyst Price Target has declined modestly from $37.44 to $36.56, reflecting a slightly more cautious outlook.
- Discount Rate has risen slightly from 8.30% to 8.43%. This suggests a minor increase in perceived risk or required return by analysts.
- Revenue Growth expectations have edged down from 2.34% to 2.31%. This indicates a very small reduction in anticipated top-line expansion.
- Net Profit Margin is virtually unchanged, moving from 10.86% to 10.85%. This shows little change in expected profitability.
- Future Price/Earnings (P/E) Ratio has decreased from 16.67x to 16.36x. This signals a slight compression in valuation multiples by the market.
Disclaimer
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