Axalta Coating Systems (AXTA – Research Report), the Basic Materials sector company, was revisited by a Wall Street analyst today. Analyst Jeffrey Zekauskas from J.P. Morgan maintained a Hold rating on the stock and has a $32.00 price target.
Jeffrey Zekauskas has given his Hold rating due to a combination of factors affecting Axalta Coating Systems. Despite the company’s efforts in cost-cutting and restructuring, which led to a positive earnings performance in the first quarter of 2025, there are concerns about volume growth. The expectation of slightly negative volume growth for the year, coupled with a conservative outlook for the second quarter, suggests potential challenges ahead.
Moreover, Axalta’s current market performance, while strong, is not seen as particularly appealing in terms of risk and reward. The company’s exposure to the global auto production market, which is contracting, and the shrinking auto refinish market, pose significant risks. Additionally, the valuation gap between Axalta and its competitor PPG has narrowed, making the long Axalta-short PPG strategy less attractive. These factors, along with cyclical risks such as tariffs, contribute to the Hold rating, as the potential for Axalta’s trading multiples to increase is limited.
Based on the recent corporate insider activity of 39 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of AXTA in relation to earlier this year.