Axalta Coating Systems: Hold Rating Maintained Amid Price Target Adjustment and Mixed Segment Performance

Analyst Vincent Andrews from Morgan Stanley maintained a Hold rating on Axalta Coating Systems (AXTA – Research Report) and decreased the price target to $36.00 from $40.00.

Vincent Andrews has given his Hold rating due to a combination of factors impacting Axalta Coating Systems. The primary reason for this rating is the adjustment in the price target from $40 to $36, which reflects a decrease in peer multiples and a recent underperformance in stock price compared to the S&P index. This underperformance is attributed to negative commentary on Refinish demand and a weaker-than-expected EBITDA guidance for the second quarter, suggesting a more back-loaded performance for the year.
Additionally, Andrews revised the EBITDA estimates for the second quarter from $303 million to $285 million, taking into account the first quarter results that slightly exceeded expectations and the newly issued guidance for the second quarter. The adjustments at the segment level, particularly the downward revision in Performance Coatings and the offsetting higher margins in Mobility Coatings, also played a role in maintaining the Hold rating. Furthermore, a reduction in interest expenses provided a financial tailwind, although this was partially counterbalanced by a slightly higher effective tax rate.

According to TipRanks, Andrews is a 4-star analyst with an average return of 4.8% and a 62.70% success rate. Andrews covers the Basic Materials sector, focusing on stocks such as Albemarle, Huntsman, and Sherwin-Williams Company.

In another report released today, J.P. Morgan also downgraded the stock to a Hold with a $32.00 price target.