Axalta Coating Systems (AXTA): Is the Stock Undervalued After Q3 Earnings Beat and Raised 2025 Outlook?

Axalta Coating Systems (AXTA) delivered an earnings surprise in the third quarter by reporting higher net income and earnings per share even as sales dipped slightly. The company also raised its full-year outlook and completed a substantial share buyback program.

See our latest analysis for Axalta Coating Systems.

Following these upbeat results and the completed buyback, Axalta's shares have experienced some renewed momentum lately, with the stock clawing back modest gains in recent months. While the year-to-date share price return sits at -14.6%, the three-year total shareholder return of 25.1% indicates that long-term investors have still come out ahead, even as the past year has been more challenging.

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With a recent earnings beat, a raised outlook, and significant buybacks fueling optimism, the key question now is whether Axalta shares are trading at a bargain or if the market has already priced in future growth prospects.

Most Popular Narrative: 20.8% Undervalued

Axalta's most cited narrative sees its fair value at $36.17, notably above its last close at $28.66. This sizable gap highlights the narrative’s confidence in future earnings and margin improvement, inviting closer scrutiny of what is driving the optimism.

Continued digitalization and customer-centric innovation, exemplified by the planned rollout of the Nimbus platform to 40,000 body shops and operational tools that enable upselling and efficiency, are expected to drive higher customer retention, greater share of wallet, and lower costs, supporting higher net margins and earnings.

Read the complete narrative.

Want to discover why this story pegs Axalta at a much higher fair value? The calculation is not just hope; there is a major projection hiding inside, built around expanding profit margins, new tech rollouts, and a more diversified business. Find out which aggressive assumptions drive that premium.

Result: Fair Value of $36.17 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing weakness in core volumes and shifts toward lower-margin segments could present challenges for Axalta's path to sustained margin and earnings growth.

Find out about the key risks to this Axalta Coating Systems narrative.

Build Your Own Axalta Coating Systems Narrative

If you want to test your own assumptions or challenge the prevailing view, it only takes a few minutes to build a narrative using the key data. Do it your way

A great starting point for your Axalta Coating Systems research is our analysis highlighting 5 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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