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1. Company Snapshot

1.a. Company Description

Axalta Coating Systems Ltd., through its subsidiaries, manufactures, markets, and distributes high-performance coatings systems in North America, Europe, the Middle East, Africa, the Asia Pacific, and Latin America.It operates through two segments, Performance Coatings and Transportation Coatings.The company offers water and solvent-borne products and systems to repair damaged vehicles for independent body shops, multi-shop operators, and original equipment manufacturer (OEM) dealership body shops.


It also provides functional and decorative liquid, and powder coatings used in various industrial applications, including architectural cladding and fittings, automotive coatings, general industrial, job coaters, energy solutions, HVAC, appliances, industrial wood, coil, and oil and gas pipelines; and coatings for building materials, cabinet, wood and luxury vinyl flooring, and furniture market under the Voltatex, AquaEC, Durapon, Hydropon, UNRIVALED, Tufcote, and Ceranamel for liquid coatings; and Alesta, Nap-Gard, Abcite, Teodur, and Plascoat brands for powder coatings.In addition, the company develops and supplies electrocoat, primer, the basecoat, and clearcoat products for OEMs of light and commercial vehicles; and coatings systems for various commercial applications, including HDT, bus, and rail under the Imron, Imron Elite, Centari, Rival, Corlar epoxy undercoats, and AquaEC brands.It also sells its product under the Audurra, Challenger, Chemophan, ColorNet, Cromax, Cromax Mosaic, Durapon 70, Duxone, Harmonized Coating Technologies, Imron ExcelPro, Lutophen, Nason, Spies Hecker, Standox, Stollaquid, Syntopal, Syrox, Raptor, U-POL, and Vermeera brand names.


The company was formerly known as Axalta Coating Systems Bermuda Co., Ltd.and changed its name to Axalta Coating Systems Ltd.in August 2014.


Axalta Coating Systems Ltd.was founded in 1866 and is headquartered in Philadelphia, Pennsylvania.

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1.b. Last Insights on AXTA

Axalta Coating Systems' recent performance was driven by its Q3 earnings beat, with quarterly earnings of $0.67 per share, surpassing the Zacks Consensus Estimate of $0.64 per share. The company's solid financial results were complemented by increased institutional investor interest, with Arrowstreet Capital Limited Partnership boosting its stake by 83.7%. Additionally, Axalta's presentation at the Citigroup 2025 Basic Materials Conference and its 2023-2024 Sustainability Report and 2025 Global Automotive Color Popularity Report releases may have contributed to its positive momentum.

1.c. Company Highlights

2. Axalta Coating Systems' Q4 2025 Earnings: A Strong Finish to a Record Year

Axalta Coating Systems Ltd. reported a robust Q4 2025, with net sales reaching approximately $1.3 billion, adjusted EBITDA of $272 million, and a margin of 21.5%. This marks the company's seventh consecutive quarter at or above its A Plan margin target of 21%. Adjusted diluted EPS was $0.59, roughly flat year over year. The company's record cash flow, with operating cash flow of $344 million and free cash flow of $290 million, underscores its strong financial performance. For the full year 2025, Axalta delivered record financial results, with adjusted EBITDA of $1.13 billion, representing a $317 million growth since 2022, and margins expanding over 500 basis points to 22%.

Publication Date: Feb -15

📋 Highlights
  • Consistent Margin Performance:: Axalta achieved a 21.5% adjusted EBITDA margin in Q4 2025, marking seven consecutive quarters at or above its 21% A Plan margin target.
  • Full-Year Record Growth:: 2025 adjusted EBITDA reached $1.13 billion, a $317 million increase since 2022, with margins expanding 500 basis points to 22%.
  • 2026 Guidance:: Expected adjusted EBITDA of $1.14–$1.17 billion and free cash flow exceeding $500 million, with EPS growth of 5% at the midpoint ($2.625).
  • Merger Synergy Potential:: The Axalta-Axonobel merger targets $600 million in synergies, with combined EBITDA margins approaching 20% and a $1.3 billion steady-state EBITDA target.
  • Regional Refinish Trends:: South America, Europe, and Asia saw Refinish growth in 2025, while North America declined due to destocking, expected to normalize by Q2 2026.

Guidance and Outlook

The company expects 2026 revenue to be up low single digits, driven by positive price mix, favorable FX, and higher volumes in the second half. Adjusted EBITDA is expected to be between $1.14 billion and $1.17 billion, and adjusted diluted earnings per share to be $2.55 to $2.70 per share, representing approximately 5% growth at the midpoint versus 2025. The company also expects full-year free cash flow of greater than $500 million, indicating a strong outlook for the upcoming year.

Merger Synergies and Strategy

Axalta's merger with Axonobel is expected to create a global leader with significant free cash flow generation, EBITDA margins approaching 20%, and an investment-grade credit rating. The combined company will have a synergy potential of $600 million, with $100-200 million expected from revenue synergies. As Carl Anderson noted, "they believe there's upside to the synergies, particularly in revenue synergies." The merger is seen as complementary, particularly in the Refinish segment, where Axalta is stronger in premium and economy segments.

Valuation and Metrics

With a P/E Ratio of 19.27 and an EV/EBITDA of 6.45, Axalta's valuation suggests a reasonable multiple for its earnings and cash flow generation. The company's ROE of 16.86% and ROIC of 8.16% indicate a strong return on equity and invested capital, respectively. The actual EPS of $0.59 was slightly below estimates of $0.6, but the company's guidance for 2026 suggests continued growth. Analysts estimate next year's revenue growth at 3.0%, which is in line with the company's guidance for low single-digit growth.

3. NewsRoom

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Axalta: Underwhelming Results, An Equally Underwhelming Potential Merger

Feb -17

Source: seekingalpha.com

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Axalta Coating Systems Ltd. (NYSE:AXTA) Receives Average Recommendation of “Hold” from Analysts

Feb -17

Source: defenseworld.net

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Axalta Coating Systems (AXTA) Q4 Earnings: How Key Metrics Compare to Wall Street Estimates

Feb -11

Source: zacks.com

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Axalta Coating Systems Ltd. (AXTA) Q4 2025 Earnings Call Transcript

Feb -10

Source: seekingalpha.com

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Axalta Coating Systems (AXTA) Misses Q4 Earnings Estimates

Feb -10

Source: zacks.com

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Axalta Releases Fourth Quarter and Record Full Year 2025 Results

Feb -10

Source: globenewswire.com

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Arnhold More Than Doubles Axalta Coatings Systems Share Holding

Feb -09

Source: fool.com

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Axalta Stock Is Down 10% in a Year, but One Investor Just Bought $9.5 Million in Shares

Feb -06

Source: fool.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.26%)

6. Segments

Performance Coatings

Expected Growth: 3.5%

Axalta's Performance Coatings segment growth of 3.5% is driven by increasing demand for sustainable and eco-friendly coatings in the automotive and industrial markets, coupled with the company's strategic expansion into emerging markets and continuous innovation in coating technologies.

Mobility Coatings

Expected Growth: 2.8%

Axalta's Mobility Coatings segment growth of 2.8% is driven by increasing demand for sustainable and eco-friendly coatings in the automotive industry, coupled with the company's strategic expansion into emerging markets and continuous innovation in coating technologies, such as waterborne and powder coatings.

7. Detailed Products

Refinish Coatings

A wide range of coatings for the automotive refinish market, including basecoats, clearcoats, and single-stage urethanes.

Light Vehicle OEM Coatings

Coatings for original equipment manufacturers (OEMs) of light vehicles, including e-coats, primers, basecoats, and clearcoats.

Commercial Vehicle OEM Coatings

Coatings for OEMs of commercial vehicles, including trucks, buses, and trailers.

Industrial Coatings

Coatings for a variety of industrial applications, including coil coatings, general industrial coatings, and powder coatings.

Electrocoat (E-Coat) Products

Electrocoat products for a variety of applications, including automotive, industrial, and architectural coatings.

8. Axalta Coating Systems Ltd.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Axalta Coating Systems Ltd. operates in a niche market with high barriers to entry, reducing the threat of substitutes. However, the company's products are not entirely unique, and customers may find alternative solutions.

Bargaining Power Of Customers

Axalta Coating Systems Ltd. has a diverse customer base, reducing the bargaining power of individual customers. Additionally, the company's products are often customized, making it difficult for customers to switch suppliers.

Bargaining Power Of Suppliers

Axalta Coating Systems Ltd. relies on a few key suppliers for raw materials, giving them some bargaining power. However, the company's large scale of operations and long-term contracts mitigate this risk.

Threat Of New Entrants

The coatings industry has high barriers to entry, including significant capital expenditures and regulatory hurdles. This limits the threat of new entrants and allows Axalta Coating Systems Ltd. to maintain its market position.

Intensity Of Rivalry

The coatings industry is highly competitive, with several established players competing for market share. Axalta Coating Systems Ltd. must continually innovate and improve its products to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 67.18%
Debt Cost 7.97%
Equity Weight 32.82%
Equity Cost 11.51%
WACC 9.13%
Leverage 204.68%

11. Quality Control: Axalta Coating Systems Ltd. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
WD-40

A-Score: 4.8/10

Value: 1.5

Growth: 6.0

Quality: 8.5

Yield: 3.0

Momentum: 1.0

Volatility: 8.7

1-Year Total Return ->

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Stock-Card
Axalta Coating Systems

A-Score: 4.7/10

Value: 5.3

Growth: 5.6

Quality: 7.0

Yield: 0.0

Momentum: 2.5

Volatility: 7.7

1-Year Total Return ->

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Stock-Card
Quaker Chemical

A-Score: 4.6/10

Value: 5.9

Growth: 6.2

Quality: 3.5

Yield: 3.0

Momentum: 3.5

Volatility: 5.3

1-Year Total Return ->

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Stock-Card
Avient

A-Score: 4.5/10

Value: 5.4

Growth: 3.2

Quality: 4.0

Yield: 7.0

Momentum: 1.5

Volatility: 6.0

1-Year Total Return ->

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Stock-Card
Albemarle

A-Score: 3.8/10

Value: 4.0

Growth: 3.4

Quality: 3.3

Yield: 2.0

Momentum: 7.5

Volatility: 2.7

1-Year Total Return ->

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Stock-Card
Avantor

A-Score: 3.4/10

Value: 6.4

Growth: 5.8

Quality: 3.3

Yield: 0.0

Momentum: 1.0

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

35.57$

Current Price

35.57$

Potential

-0.00%

Expected Cash-Flows