Earnings Update: Axalta Coating Systems Ltd. (NYSE:AXTA) Just Reported Its Second-Quarter Results And Analysts Are Updating Their Forecasts

Axalta Coating Systems Ltd. (NYSE:AXTA) came out with its quarterly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. The result was positive overall - although revenues of US$1.4b were in line with what the analysts predicted, Axalta Coating Systems surprised by delivering a statutory profit of US$0.51 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Axalta Coating Systems after the latest results.

See our latest analysis for Axalta Coating Systems

Taking into account the latest results, Axalta Coating Systems' 18 analysts currently expect revenues in 2024 to be US$5.32b, approximately in line with the last 12 months. Per-share earnings are expected to soar 26% to US$1.71. Before this earnings report, the analysts had been forecasting revenues of US$5.31b and earnings per share (EPS) of US$1.66 in 2024. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates.

There's been no major changes to the consensus price target of US$40.98, suggesting that the improved earnings per share outlook is not enough to have a long-term positive impact on the stock's valuation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. Currently, the most bullish analyst values Axalta Coating Systems at US$45.00 per share, while the most bearish prices it at US$35.00. This is a very narrow spread of estimates, implying either that Axalta Coating Systems is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Axalta Coating Systems' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.5% growth on an annualised basis. This is compared to a historical growth rate of 5.2% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 4.8% annually. Factoring in the forecast slowdown in growth, it seems obvious that Axalta Coating Systems is also expected to grow slower than other industry participants.

The Bottom Line

The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Axalta Coating Systems following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Axalta Coating Systems' revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$40.98, with the latest estimates not enough to have an impact on their price targets.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Axalta Coating Systems going out to 2026, and you can see them free on our platform here..

Before you take the next step you should know about the 1 warning sign for Axalta Coating Systems that we have uncovered.

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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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