NYSE:AXTA

Stock Analysis Report

Axalta Coating Systems

Executive Summary

Axalta Coating Systems Ltd., through its subsidiaries, manufactures, markets, and distributes high performance coatings systems.

Rewards

Trading at 17.9% below its fair value

Earnings are forecast to grow 13.2% per year

Earnings grew by 302.7% over the past year

Risk Analysis

Debt is not well covered by operating cash flow



Snowflake Analysis

Solid track record with mediocre balance sheet.


Similar Companies

Share Price & News

How has Axalta Coating Systems's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: AXTA has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

6.8%

AXTA

0.4%

US Chemicals

0.3%

US Market


1 Year Return

30.5%

AXTA

1.3%

US Chemicals

18.5%

US Market

Return vs Industry: AXTA exceeded the US Chemicals industry which returned 1.3% over the past year.

Return vs Market: AXTA exceeded the US Market which returned 18.5% over the past year.


Shareholder returns

AXTAIndustryMarket
7 Day6.8%0.4%0.3%
30 Day0.4%-2.4%1.5%
90 Day-0.8%4.1%5.7%
1 Year30.5%30.5%16.9%1.3%21.1%18.5%
3 Year14.6%14.6%32.7%7.6%45.9%36.4%
5 Year16.4%16.4%53.4%20.4%71.4%52.5%

Price Volatility Vs. Market

How volatile is Axalta Coating Systems's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Axalta Coating Systems undervalued compared to its fair value and its price relative to the market?

17.9%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: AXTA ($30.34) is trading below our estimate of fair value ($36.95)

Significantly Below Fair Value: AXTA is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: AXTA is poor value based on its PE Ratio (25.2x) compared to the Chemicals industry average (20.4x).

PE vs Market: AXTA is poor value based on its PE Ratio (25.2x) compared to the US market (18.5x).


Price to Earnings Growth Ratio

PEG Ratio: AXTA is poor value based on its PEG Ratio (1.9x)


Price to Book Ratio

PB vs Industry: AXTA is overvalued based on its PB Ratio (5.5x) compared to the US Chemicals industry average (2.2x).


Next Steps

Future Growth

How is Axalta Coating Systems forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?

13.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: AXTA's forecast earnings growth (13.2% per year) is above the savings rate (1.7%).

Earnings vs Market: AXTA's earnings (13.2% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: AXTA's earnings are forecast to grow, but not significantly.

Revenue vs Market: AXTA's revenue (2.9% per year) is forecast to grow slower than the US market (7.4% per year).

High Growth Revenue: AXTA's revenue (2.9% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: AXTA's Return on Equity is forecast to be high in 3 years time (26.4%)


Next Steps

Past Performance

How has Axalta Coating Systems performed over the past 5 years?

37.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: AXTA has high quality earnings.

Growing Profit Margin: AXTA's current net profit margins (6.2%) are higher than last year (1.5%).


Past Earnings Growth Analysis

Earnings Trend: AXTA has become profitable over the past 5 years, growing earnings by 37.1% per year.

Accelerating Growth: AXTA's earnings growth over the past year (302.7%) exceeds its 5-year average (37.1% per year).

Earnings vs Industry: AXTA earnings growth over the past year (302.7%) exceeded the Chemicals industry -17%.


Return on Equity

High ROE: Whilst AXTA's Return on Equity (21.44%) is high, this metric is skewed due to their high level of debt.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Axalta Coating Systems's financial position?


Financial Position Analysis

Short Term Liabilities: AXTA's short term assets ($2.4B) exceed its short term liabilities ($1.0B).

Long Term Liabilities: AXTA's short term assets ($2.4B) do not cover its long term liabilities ($4.3B).


Debt to Equity History and Analysis

Debt Level: AXTA's debt to equity ratio (282.7%) is considered high.

Reducing Debt: AXTA's debt to equity ratio has reduced from 307.2% to 282.7% over the past 5 years.

Debt Coverage: AXTA's debt is not well covered by operating cash flow (14.3%).

Interest Coverage: AXTA's interest payments on its debt are well covered by EBIT (3.3x coverage).


Balance Sheet

Inventory Level: AXTA has a high level of physical assets or inventory.

Debt Coverage by Assets: AXTA's debt is not covered by short term assets (assets are 0.6x debt).


Next Steps

Dividend

What is Axalta Coating Systems's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

companyn/amarketbottom25%1.4%markettop25%3.7%industryaverage2.1%forecastin3Years0%

Current dividend yield vs market & industry

Notable Dividend: Unable to evaluate AXTA's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate AXTA's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if AXTA's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if AXTA's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of AXTA's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

What is the CEO of Axalta Coating Systems's salary, the management and board of directors tenure and is there insider trading?

1.0yrs

Average management tenure


CEO

Robert Bryant (51yo)

1.2yrs

Tenure

US$4,348,333

Compensation

Mr. Robert W. Bryant is the Chief Executive Officer of Axalta Coating Systems Ltd. since December 11, 2018 and is its Director since 2018. Mr. Robert W. Bryant was Interim Chief Executive Officer of Axalta ...


CEO Compensation Analysis

Compensation vs Market: Robert's total compensation ($USD4.35M) is below average for companies of similar size in the US market ($USD6.81M).

Compensation vs Earnings: Robert's compensation has increased by more than 20% in the past year.


Management Age and Tenure

1.0yrs

Average Tenure

53yo

Average Age

Experienced Management: AXTA's management team is not considered experienced ( 1 years average tenure), which suggests a new team.


Board Age and Tenure

2.7yrs

Average Tenure

61yo

Average Age

Experienced Board: AXTA's board of directors are not considered experienced ( 2.7 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$740,50515 Feb 19
Charles Shaver
EntityIndividual
Shares27,912
Max PriceUS$26.53
SellUS$1,365,09708 Feb 19
Charles Shaver
EntityIndividual
Shares52,217
Max PriceUS$26.42

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • John McCool (66yo)

    President

    • Tenure: 0yrs
  • Chris Mecray

    Vice President of Investor Relations

    • Tenure: 4.8yrs
  • Barry Snyder (56yo)

    Senior VP

    • Tenure: 0.4yrs
  • Robert Bryant (51yo)

    CEO & Director

    • Tenure: 1.2yrs
    • Compensation: US$4.35m
  • Steve Markevich (59yo)

    Executive VP and President of Transportation Coatings & Greater China

    • Tenure: 6.5yrs
    • Compensation: US$4.18m
  • Michael Finn (53yo)

    Consultant

    • Tenure: 1yrs
    • Compensation: US$3.43m
  • Sean Lannon (40yo)

    Senior VP & CFO

    • Tenure: 1.2yrs
    • Compensation: US$1.33m
  • Ashish Jawadiwar

    VP and Chief Information & Digital Officer

    • Tenure: 0.7yrs
  • Anthony Massey (36yo)

    Principal Accounting Officer

    • Tenure: 0.6yrs
  • Robert Roop

    VP & CTO

    • Tenure: 0.4yrs

Board Members

  • Bill Cook (66yo)

    Director

    • Tenure: 0.6yrs
  • Bob McLaughlin (62yo)

    Independent Director

    • Tenure: 5.7yrs
    • Compensation: US$298.95k
  • Liz Lempres (58yo)

    Independent Director

    • Tenure: 2.7yrs
    • Compensation: US$274.97k
  • Marc Garrett (57yo)

    Chairman & Presiding Director

    • Tenure: 0.5yrs
    • Compensation: US$283.56k
  • Sam Smolik (65yo)

    Independent Director

    • Tenure: 3.3yrs
    • Compensation: US$287.87k
  • Robert Bryant (51yo)

    CEO & Director

    • Tenure: 1.2yrs
    • Compensation: US$4.35m
  • Debbie Kissire (61yo)

    Independent Director

    • Tenure: 3yrs
    • Compensation: US$284.97k

Company Information

Axalta Coating Systems Ltd.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Axalta Coating Systems Ltd.
  • Ticker: AXTA
  • Exchange: NYSE
  • Founded: 1866
  • Industry: Specialty Chemicals
  • Sector: Materials
  • Market Cap: US$6.946b
  • Shares outstanding: 234.65m
  • Website: https://www.axalta.com

Number of Employees


Location

  • Axalta Coating Systems Ltd.
  • Two Commerce Square
  • Suite 3600
  • Philadelphia
  • Pennsylvania
  • 19103
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
AXTANYSE (New York Stock Exchange)YesCommon StockUSUSDNov 2014
9AXDB (Deutsche Boerse AG)YesCommon StockDEEURNov 2014
0U6CLSE (London Stock Exchange)YesCommon StockGBUSDNov 2014

Biography

Axalta Coating Systems Ltd., through its subsidiaries, manufactures, markets, and distributes high performance coatings systems. It operates in two segments, Performance Coatings and Transportation Coating ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/09 00:22
End of Day Share Price2019/12/06 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.