On Friday, Wolfe Research revised its stance on Axalta Coating Systems (NYSE:AXTA), elevating the stock from Peer Perform to Outperform and setting a price target of $41.00. The upgrade was based on the company's consistent global market share gains in its Refinish and Auto OE platforms, which together represent approximately 60% of its $1.05 billion EBITDA. According to InvestingPro data, the company's current market capitalization stands at $7.78 billion, with analysts setting price targets ranging from $34.61 to $51.00.
Despite a cautious outlook on the broader economic landscape, Wolfe Research acknowledges Axalta's potential to demonstrate profit momentum even before notable improvements in end markets become apparent. The firm's analysts believe that Axalta's performance in 2025 will reflect its ability to capitalize on these gains. InvestingPro analysis reveals the company maintains a strong financial health score of "GREAT," with a robust current ratio of 2.0, indicating solid liquidity position.
Axalta, known for its performance and transportation coatings, has been focusing on expanding its market share in the Refinish segment, which deals with automotive aftermarket painting and repair, as well as the Auto OE (Original Equipment) segment that supplies coatings to car manufacturers.
The company's strategic efforts are expected to yield positive results, as indicated by Wolfe Research's upgraded rating. Axalta's ability to improve profitability in anticipation of market recovery is seen as a key driver for the optimistic outlook.
Investors and market watchers will be looking closely at Axalta's upcoming financial reports, with the next earnings announcement scheduled for January 29, to assess whether the company is on track to meet the expectations set forth by Wolfe Research's analysis. The $41.00 price target suggests a confident view of Axalta's future performance and its role in the competitive coatings industry.
For deeper insights into Axalta's financial health and growth prospects, access the comprehensive Pro Research Report available exclusively on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.
In other recent news, Sherwin-Williams (NYSE:SHW)' price target has been adjusted by RBC Capital Markets, reducing it to $438 from the previous $446, while maintaining an Outperform rating. The RBC analyst anticipates a fourth-quarter performance that aligns with expectations and forecasts growth in EBITDA and EPS for the fiscal year 2025. Sherwin-Williams is expected to benefit from volume growth due to anticipated interest rate cuts, which could increase new and existing home sales in fiscal year 2025. The company's financial strategy remains focused on staying within its long-term leverage target range of 2.0x to 2.5x.
Meanwhile, Citi has downgraded Axalta Coating Systems from Buy to Neutral, reducing the price target to $41 from the previous $45, due to potential challenges in the commercial vehicle and industrial coatings sectors. Despite these concerns, Axalta maintains strong financial health with a current ratio of 2.0 and generates $5.26 billion in trailing twelve-month revenue. The company also successfully renegotiated the terms of its existing credit agreement, effectively lowering the interest rate spread on the term loan from 2.00% to 1.75%.
On the other hand, Axalta Coating Systems received a price target bump from BMO Capital, raising it to $48.00 from $46.00, and reaffirming an Outperform rating. Evercore ISI also began coverage on Axalta, assigning an Outperform rating and setting a price target of $47.00.
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