1. Axalta Coating Systems Ltd. (NYSE:AXTA)
Forward P/E: 15.50
Earnings Growth: 31.20%
Number of Hedge Fund Holders: 47
Axalta Coating Systems Ltd. (NYSE:AXTA) is a specialty chemicals and materials company that produces and distributes coatings systems for various industries, including commercial vehicles and automotive refinish markets. The company serves customers in over 130 countries, offering coatings designed to enhance durability, prevent corrosion, and improve productivity.
The company is strategically focused on growth in the premium segment, leveraging its innovative single-visit application waterborne system, the launch of its fully automated mixing machine Irux Mix and automated color-matching technology, and a host of digital tools to attract new customers.
In the second quarter of 2024, Axalta Coating Systems Ltd. (NYSE:AXTA) reported impressive financial results, with net sales increasing 4.4% year-over-year to $1.35 billion. Net income rose by $52 million to $113 million, while adjusted EBITDA improved by $64 million to reach $291 million. Diluted EPS surged 89% year-over-year to $0.51, with adjusted diluted EPS rising 63% to $0.57.
In July, Axalta Coating Systems Ltd. (NYSE:AXTA) completed the acquisition of the CoverFlexx group, which specializes in coatings for automotive refinish and aftermarket applications aimed at economy customers in North America. This acquisition enhances the company’s product offerings by providing a wide range of coatings, aerosols, fillers, and paint shop accessories. With this acquisition, Axalta Coating Systems Ltd. (NYSE:AXTA) can better serve the economy segment, which presents significant growth potential.
Additionally, the company is introducing innovative products like its cabinet coatings, which are gaining popularity. These products are part of a focused strategy to prioritize market segments where Axalta Coating Systems Ltd. (NYSE:AXTA) can deliver strong value and achieve attractive returns. By leveraging its advanced technologies and expanding its portfolio, Axalta Coating Systems Ltd. (NYSE:AXTA) is well-positioned to enhance its market presence and drive future growth.
Analysts have a positive outlook on AXTA. Their 12-month median price target of $42.00 indicates a potential increase of 19% from the stock’s current price.
According to Insider Monkey’s database of over 900 hedge funds, 47 hedge funds held stakes in Axalta Coating Systems Ltd. (NYSE:AXTA) in Q2 2024.
Overall, AXTA ranks first among the 10 undervalued chemical stocks to invest in. While we acknowledge the potential of chemical companies, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AXTA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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