In this article, we will explore the 10 undervalued chemical stocks to invest in.
Key Trends Shaping the Future of the Chemical Industry
Chemicals are essential to our daily lives and play a crucial role in many sectors. The chemical industry provides the materials needed to create a wide range of products, from medicines and agricultural chemicals to plastics and cleaning supplies. This industry also supports innovations in renewable energy, such as solar panels and wind turbines. It also helps produce lightweight materials for vehicles, advanced batteries for electric cars, and durable building materials.
Increasing demand for sustainable and innovative products, advancements in technology, and urbanization, are some of the key factors driving growth of the chemicals market. According to a report by The Business Research Company, the chemicals market was valued at $5.11 trillion in 2023. The market is expected to grow at a compound annual growth rate (CAGR) of 8.7% during 2024-2028 to reach a value of $7.78 trillion by the end of the forecast period.
The chemical industry is currently experiencing significant changes driven by sustainability and technological advancements. The industry plays a crucial role in addressing global challenges like climate change and resource efficiency. According to a recent sustainability report titled “Sustainability Starts with Chemistry,” released by the American Chemistry Council (ACC) in May 2024, ACC member chemical companies have made significant progress in reducing emissions. Since 2017, these companies have cut sulfur oxide (SOx) emissions by 43% and nitrogen oxide (NOx) emissions by 18%.
The report highlights that member companies of the ACC are exploring, developing, and deploying various innovative technologies that reduce emissions. These include methods for capturing, using, and storing carbon, as well as producing lower-emissions hydrogen and exploring alternative feedstocks. This showcases their commitment to environmental responsibility and sustainable practices.
Innovation continues to be a top priority for the chemicals industry. On January 16, 2024, McKinsey & Company published an article that discussed a survey conducted by the company of over 200 senior leaders in North America’s chemical sector, including top executives from leading companies, investment firms, and startups. The survey found that chemical process innovation is viewed as the most important focus area, with 90% of investors and 97% of industry leaders planning to invest more than $50 million in this area over the next two years. While AI-assisted discovery is not considered the top priority, it remains a significant area of interest. According to the survey results, 43% of investors and 75% of chemical industry leaders are looking to invest over $100 million in AI-driven product development.
Digitalization is another crucial factor shaping the future of the chemical industry. According to Deloitte’s 2024 chemical industry outlook, digital investments in the sector declined in 2023, partly due to a sluggish US economy and high interest rates. After a 6.6% increase in 2022, spending on information technology in the chemical industry is expected to drop by 0.1% in 2023. However, this drop is likely to be short-lived. Many chemical companies are launching AI programs aimed at accelerating research and development for sustainable products, predicting the effects of production changes, and gaining valuable insights by tracking data throughout the entire value chain.
Overall, as the chemical industry embraces sustainability, innovation, and digital transformation, it positions itself for growth. Companies that prioritize these trends can not only contribute positively to the environment but also achieve better financial performance in the long run.
With this background in mind, let’s take a look at the 10 undervalued chemical stocks to invest in.
A chemist in a laboratory mixing specialty chemicals and materials for research.
Methodology
To compile our list of the 10 undervalued chemical stocks to invest in, we reviewed our own rankings, sifted through ETFs, and consulted various online resources. From an initial pool of over 30 chemical stocks, we focused on those trading at under or around 15 times their forward earnings as of October 24. We further narrowed down our selection by looking for chemical stocks expected to show positive earnings growth this year.
Next, we ranked the best chemical stocks based on hedge fund holdings. Data for the hedge fund sentiment surrounding each stock was taken from Insider Monkey’s database of 912 elite hedge funds. The 10 undervalued chemical stocks to invest in are ranked below in ascending order based on the number of hedge funds holding stakes in them as of Q2 2024.
Why do we care about what hedge funds do? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
10 Undervalued Chemical Stocks to Invest In
10. Braskem S.A. (NYSE:BAK)
Forward P/E: 11.32
Earnings Growth: 0.40%
Number of Hedge Fund Holders: 8
Braskem S.A. (NYSE:BAK) is a Brazilian petrochemical company based in São Paulo, recognized as the largest petrochemical firm in Latin America and a significant player in the global market. As one of the largest petrochemical companies in the world, it has industrial units across Brazil, the United States, Mexico, Europe, and Asia. The company specializes in producing a diverse range of petrochemicals and thermoplastics, including polyethylene (PE), polypropylene (PP), polyvinyl chloride (PVC), and green polyethylene made from renewable materials.
The company’s products are used to manufacture essentials for various everyday applications, such as food packaging, automotive parts, furniture, and paint and coatings. Braskem S.A. (NYSE:BAK) is also a pioneer in biopolymer production on an industrial scale, emphasizing its commitment to sustainability and innovation in the chemical industry.
In the second quarter of 2024, the company reported a recurring EBITDA of $320 million, marking a 39% increase from the previous quarter and a 128% rise compared to the same period last year. Improved petrochemical spreads in the international market and effective cost management contributed to this growth. Braskem S.A. (NYSE:BAK) generated $214 million in operating cash, with recurring cash generation at $69 million. The company maintained a strong liquidity position with $2.8 billion in cash by the end of Q2 2024, ensuring it can meet debt obligations over the next five years.
Braskem S.A.’s (NYSE:BAK) focus on resilience and financial health has positively impacted its operations. The construction of an ethane import terminal in Mexico is progressing well, expected to be completed by the end of 2024. Additionally, the company entered a strategic partnership in June to enhance its environmental solutions. Braskem S.A. (NYSE:BAK) also made its first sale of circular polypropylene (PP) produced through chemical recycling in partnership with the Swiss company Georg Utz AG.
Despite challenges like extreme weather affecting production, Braskem’s (NYSE:BAK) ability to leverage inventory helped mitigate sales impacts in Q2 2024. Overall, the company’s strong financial performance and commitment to innovation make it an attractive stock for investors looking for opportunities in the chemical sector.
BAK is one of the best chemical stocks to buy. According to Insider Monkey’s Q2 2024 database of over 900 hedge funds, 8 hedge funds held stakes in Braskem S.A. (NYSE:BAK).
9. Tronox Holdings plc (NYSE:TROX)
Forward P/E: 9.10
Earnings Growth: 300.00%
Number of Hedge Fund Holders: 18
Tronox Holdings plc (NYSE:TROX) is an American chemical company specializing in the titanium products industry. The company mines and processes titanium ore, zircon, and other materials to manufacture titanium dioxide pigment, specialty titanium products, and high-purity titanium chemicals. These products enhance brightness and durability in various applications, including paints, coatings, inks, plastics, and many everyday items. With about 6,500 employees across six continents, Tronox Holdings plc (NYSE:TROX) is well-positioned in the global market.
In the third quarter of 2024, the company reported impressive financial results with revenue reaching $804 million, a 21% increase compared to the previous year. This growth was driven mainly by higher sales volumes of titanium dioxide (TiO2), zircon, and other products. Tronox Holdings plc (NYSE:TROX) invested $101 million in capital expenditures during the quarter, focusing on mining extension projects in South Africa. Additionally, Tronox (NYSE:TROX) has returned $61 million to shareholders through dividends in the first nine months of 2024.
Adjusted EBITDA for the quarter was $143 million, reflecting a 23% increase due to improved sales volumes and production costs. Looking ahead, Tronox Holdings plc (NYSE:TROX) plans to invest a total of approximately $130 million in its South African mining projects to maintain a competitive cost advantage for its feedstock. The company’s ongoing research and development efforts are aimed at driving product innovation and profitability while exploring opportunities in the rare earth market.
Tronox Holdings plc’s (NYSE:TROX) strong performance, strategic investments, and commitment to innovation make it an attractive stock for investors.
TROX is trading at 9 times its forward earnings. Additionally, analysts have a consensus buy rating on the stock. The median 12-month stock price target of $18.00 set by analysts indicates a potential upside of 45% from current levels. Tronox Holdings plc (NYSE:TROX) was held by 18 hedge funds in Q2 2024.
8. Methanex Corporation (NASDAQ:MEOH)
Forward P/E: 8.89
Earnings Growth: 20.90%
Number of Hedge Fund Holders: 19
Methanex Corporation (NASDAQ:MEOH) is a Canadian chemical company that specializes in the production and distribution of methanol worldwide. As the largest methanol producer globally, Methanex operates production facilities in Canada, Chile, Egypt, New Zealand, Trinidad and Tobago, and the United States. The company has a strong supply chain supported by terminals and the largest fleet of dedicated methanol ocean tankers.
On September 8, 2024, Methanex Corporation (NASDAQ:MEOH) reported that it has entered into a definitive agreement to acquire OCI Global’s international methanol business for $2.05 billion. This deal includes two major methanol facilities in Beaumont, Texas, one of which also produces ammonia. The acquisition aligns with Methanex’s strategy to enhance its production capabilities and access to North American natural gas feedstock, which is crucial for methanol production. The transaction is expected to close in the first half of 2025 and it also includes a low-carbon methanol production and marketing business and a currently inactive methanol facility in the Netherlands.
In the second quarter of 2024, the company reported a net income attributable to shareholders of $35 million and an adjusted EBITDA of $164 million. Although production was affected by gas constraints in Chile, Egypt, and New Zealand, the average realized price for methanol increased to $352 per tonne in Q2 2024 from $343 per tonne in Q1 2024. Methanex Corporation (NASDAQ:MEOH) returned $12.5 million to shareholders through dividends and ended the quarter with $426 million in cash.
The company successfully produced its first methanol at the Geismar 3 (G3) plant in Louisiana in late July 2024. With G3 expected to ramp up to full production, it will significantly enhance Methanex Corporation’s (NASDAQ:MEOH) cash flow generation capabilities while maintaining one of the lowest emission intensity profiles in the industry. This development positions the company for improved sales and earnings as G3 becomes fully integrated into its operations.
With its commitment to operational excellence and strategic growth initiatives, Methanex Corporation (NASDAQ:MEOH) is well-positioned for future success. The combination of strong performance, strategic acquisitions, and a focus on sustainability makes MEOH an attractive stock for investors looking for opportunities in the chemical sector.
7. Cabot Corporation (NYSE:CBT)
Forward P/E: 13.72
Earnings Growth: 31.20%
Number of Hedge Fund Holders: 22
Cabot Corporation (NYSE:CBT) is an American specialty chemicals and performance materials company. It is a leading provider of reinforcing carbons, specialty carbons, battery materials, engineered elastomer composites, inkjet colorants, masterbatches and conductive compounds, fumed metal oxides and aerogel. Through its wide range of products and solutions, the corporation serves key industries like transportation, infrastructure, environment and consumer.
The company reported strong financial results for the third quarter of fiscal 2024, with diluted earnings per share (EPS) of $1.94 and adjusted EPS of $1.92, reflecting a 35% increase in adjusted EPS compared to the same quarter last year. The Reinforcement Materials segment generated an EBIT of $136 million, a 3% rise year-over-year. The Performance Chemicals segment saw a remarkable 72% increase in EBIT to reach $55 million. During this quarter, Cabot Corporation (NYSE:CBT) generated cash flows from operations totaling $207 million, allowing the company to return $73 million to shareholders through a combination of share repurchases and dividends.
During the company’s Q3 2024, a significant highlight was the launch of Cabot Corporation’s (NYSE:CBT) new REPLASBLAK universal circular black masterbatches, which are the first of their kind with International Sustainability and Carbon Certification (ISCC PLUS). This innovative product line offers customers a versatile masterbatch suitable for various automotive applications, including coloring polyolefins and engineering plastics.
Additionally, on September 20, 2024, Cabot Corporation (NYSE:CBT) announced it had been selected for an award negotiation of up to $50 million from the U.S. Department of Energy. This grant will support the corporation’s development of a new manufacturing facility for battery-grade carbon nanotubes and conductive additive dispersions, critical for the domestic lithium-ion battery supply chain.
Over the past 5 years, Cabot Corporation (NYSE:CBT) has grown its net income at a compound annual growth rate (CAGR) of 16.95%, while its levered free cash flow has increased at a CAGR of 9.54% during the same period.
With strong financial performance, innovative product launches, and strategic investments in sustainability, CBT presents a compelling opportunity. It is one of the best chemical stocks to buy. According to Insider Monkey’s database, 22 hedge funds held stakes in Cabot Corporation (NYSE:CBT) in the second quarter of 2024.
6. Minerals Technologies Inc. (NYSE:MTX)
Forward P/E: 10.95
Earnings Growth: 17.10%
Number of Hedge Fund Holders: 24
Minerals Technologies Inc. (NYSE:MTX) is a leading specialty chemicals and minerals company that develops, produces, and markets a wide range of mineral-based products and related systems. The company serves various industries, including household goods, food and pharmaceuticals, paper, packaging, automotive, construction, and environmental sectors. With expertise in inorganic chemistry and crystallography, Minerals Technologies Inc. (NYSE:MTX) produces value-added products that enhance the functionality of consumer and industrial goods.
In the third quarter of 2024, the company reported earnings per share of $1.45, or $1.51 excluding special items, marking a record for the company in this quarter. Total net sales reached $525 million, a slight decline of 4% from the previous year. However, the reported operating income was $77 million, with an adjusted operating income of $79 million, reflecting a 3% increase year-over-year. This demonstrates Minerals Technologies Inc.’s (NYSE:MTX) effective margin expansion strategy.
On October 22, 2024, the company announced an expanded partnership with AIM Intelligent Machines Inc., focusing on AI-enabled solutions for mining equipment. This collaboration aims to enhance safety and productivity in mining operations by retrofitting existing equipment with advanced technology. Such innovations position Minerals Technologies Inc. (NYSE:MTX) to leverage cutting-edge technology in complex environments, unlocking greater efficiency and value.
With a strong focus on research and development and strategic partnerships aimed at enhancing operational capabilities, Minerals Technologies Inc. (NYSE:MTX) presents a compelling investment opportunity.
Analysts are also bullish on MTX. The 12-month median price target of $99.50 set by analysts indicates a potential upside of 30% from the current stock price.
5. Eastman Chemical Company (NYSE:EMN)
Forward P/E: 11.95
Earnings Growth: 20.20%
Number of Hedge Fund Holders: 28
Eastman Chemical Company (NYSE:EMN) is an American company that produces a variety of advanced materials, chemicals, and fibers used in everyday products. The company serves multiple end markets, including transportation, building and construction, and consumables. In 2021, Eastman Chemical Company (NYSE:EMN) began constructing one of the world’s largest plastic-to-plastic advanced recycling facilities in Kingsport, demonstrating its commitment to sustainability.
In the second quarter of 2024, the company reported impressive financial results with sales revenue of $2.36 billion, reflecting a 2% increase driven by a 6% rise in sales volume, despite a 4% decline in selling prices. The company’s operating cash flow in Q2 2024 was robust at $367 million, allowing it to return $195 million to shareholders through share repurchases and dividends. Furthermore, Eastman Chemical Company (NYSE:EMN) achieved a significant milestone by ramping up operations at its Kingsport methanolysis facility, which now processes hard-to-recycle feedstocks.
Eastman’s (NYSE:EMN) focus on specialty product offerings and effective price-cost management has led to a 300-basis-point margin improvement compared to the previous quarter. This strategic approach positions the company well for future growth as it also continues to enhance its circular economy initiatives.
EMN ranks among the top 5 on our list of the 10 undervalued chemical stocks to invest in. According to Insider Monkey’s database of over 900 hedge funds, 28 hedge funds held stakes in Eastman Chemical Company (NYSE:EMN) in Q2 2024.
ClearBridge Investments stated the following regarding Eastman Chemical Company (NYSE:EMN) in its “ClearBridge Sustainability Leaders Strategy” second quarter 2024 investor letter:
“Helping companies meet these new rules will be ClearBridge holding Eastman Chemical Company (NYSE:EMN), which makes a range of advanced materials, chemicals and fibers for everyday purposes, among them plastics for food packaging. In a recent engagement with Eastman Chemical we discussed two different chemical recycling technologies it has developed: polyester renewal technology (‘PRT’) and carbon renewal technology (‘CRT’). PRT recycles polyester-based materials such as soda bottles, carpet fibers and even clothing, breaking down their basic molecules until they are indistinguishable from materials made from virgin or nonrecycled content. CRT operates in a similar way but can take a broader range of plastic types and replaces the use of coal as a feedstock to make fibers. Combining these two technologies gives Eastman a competitive advantage in molecular recycling, as it can take most types of waste plastics (Exhibit 1). Ironically, securing feedstock (i.e., waste plastic) has been a bottleneck to scaling molecular recycling as competitor technologies not using Eastman’s dual technologies often require the waste plastic to be separated purely according to grade, which waste and recycling companies do not readily offer. Eastman’s dual technology approach allows it to accept most plastic grades, making it less reliant on waste companies’ sorting.
Eastman’s first recycling plant is now operational in Tennessee, which will supply its internal Advanced Materials lines while also proving out the technology. The company is already working toward a second plant in Texas that will have Pepsi (PEP) as its anchor customer. In the second plant, not only will Eastman help Pepsi meet its recycled content goals, but it is also expected to receive long-term, take-or-pay volume commitments, for doing so. This should greatly improve earnings visibility, and in turn, potentially valuation…” (Click here to read the full text)
4. Celanese Corporation (NYSE:CE)
Forward P/E: 9.98
Earnings Growth: 15.20%
Number of Hedge Fund Holders: 29
Celanese Corporation (NYSE:CE) is a chemical and specialty materials company that ranks among the best chemical stocks to buy. It is known for engineering and manufacturing a wide range of specialty materials and chemical products used across major industries, including automotive, consumer goods, and construction. Celanese is one of the largest producers of acetyl products, which serve as key intermediates in many applications.
The company leverages its extensive Acetyl Chain production network to supply essential materials for the chemicals and paints and coatings industries. Celanese’s diverse portfolio of Materials Solutions supports advancements in automotive design, consumer electronics, and life-enhancing products in the medical and food sectors. With manufacturing facilities located in North America, Europe, and Asia, Celanese Corporation (NYSE:CE) is well-positioned to meet the diverse needs of its customers.
In the second quarter of 2024, the corporation reported strong financial results, achieving diluted earnings per share of $1.42 and adjusted earnings per share of $2.38. Celanese Corporation (NYSE:CE) generated net sales of $2.7 billion, marking a 2% increase from the previous quarter, driven by a 4% rise in sales volume despite a 2% decline in pricing. Operating profit reached $250 million in Q2 2024, with adjusted EBIT at $451 million, reflecting effective execution of its strategic action plan amidst external challenges such as supplier outages.
Celanese Corporation (NYSE:CE) is focusing on enhancing operational efficiency and driving volume growth through its project pipeline model. The company is integrating its Mobility & Materials businesses into a unified SAP ERP system to improve business efficiency.
With a solid track record of growth, Celanese Corporation (NYSE:CE) stands out as a compelling investment opportunity in the chemical sector. Over the past 5 years, Celanese Corporation (NYSE:CE) has grown its top line at a compound annual growth rate (CAGR) of 9.39%, while its bottom line has increased at a CAGR of 12.97% during the same period.
As of the second quarter of 2024, CE was held by 29 hedge funds, according to Insider Monkey’s database. This brings Celanese Corporation (NYSE:CE) to the 4th spot on our list of the 10 undervalued chemical stocks to invest in.
3. Green Plains Inc. (NASDAQ:GPRE)
Forward P/E: 7.74
Earnings Growth: 28.30%
Number of Hedge Fund Holders: 29
Green Plains Inc. (NASDAQ:GPRE) is a chemical and biorefining company that transforms renewable crops into low-carbon, sustainable ingredients through advanced fermentation and agricultural technologies. The company is one of the largest ethanol producers in the US. It produces ethanol and valuable byproducts like distillers grains, ultra-high protein, and renewable corn oil. Through partnerships and innovative technologies, Green Plains Inc. (NASDAQ:GPRE) is actively evolving into a comprehensive biorefinery platform, focusing on low-carbon biofuels, renewable feedstocks for advanced biofuels, and high-protein ingredients for animal and aquaculture diets.
In February 2024, the company initiated a strategic review process to explore various opportunities aimed at enhancing long-term shareholder value. This can include potential acquisitions and partnerships, divestitures, and mergers or sale.
Green Plains Inc. (NASDAQ:GPRE) is making significant strides with its world’s first commercial-scale Clean Sugar Technology facility, which began commissioning in the second quarter of 2024. This innovative technology promises to reduce carbon intensity by up to 40% compared to traditional methods, positioning the company at the forefront of sustainable processing.
In the second quarter of 2024, the company reported revenues of $618.8 million, down from $857.6 million in Q2 2023. However, Green Plains Inc. (NASDAQ:GPRE) achieved an EBITDA of $4.8 million, reflecting a $19.7 million improvement from the prior year due to stronger performance in its ethanol production segment.
In the Q2 2024 earnings call, management shared that Green Plains Inc. (NASDAQ:GPRE) is currently upgrading equipment at its Mount Vernon and Obion plants, which is expected to enhance production efficiency in the second half of 2024. These upgrades include replacing conveyors and installing a new thermal oxidizer at the Obion facility, which will improve both ethanol and ultra-high protein production. Once these enhancements are complete, the company anticipates unlocking an additional 40 million gallons of capacity, allowing for higher run rates and better overall performance. Despite facing challenges, the company remains focused on improving operational efficiency.
Green Plains Inc.’s (NASDAQ:GPRE) commitment to sustainability, innovative technologies, and strategic growth initiatives makes it an appealing investment opportunity. Analysts are also bullish on GPRE. Analysts currently hold a consensus buy rating on the stock and the 1-year median price target of $19.00 set by analysts indicates a potential upside of 65% from current levels.
According to Insider Monkey’s database, 29 hedge funds held stakes in Green Plains Inc. (NASDAQ:GPRE) in the second quarter of 2024. This brings GPRE to the 3rd spot on our list of the 10 undervalued chemical stocks to invest in.
2. PPG Industries Inc. (NYSE:PPG)
Forward P/E: 14.45
Earnings Growth: 6.40%
Number of Hedge Fund Holders: 42
PPG Industries Inc. (NYSE:PPG) is an American chemical company that ranks among the best chemical stocks to buy. It is known for its expertise in paints, coatings, and specialty materials. The company operates in over 70 countries, serving diverse markets such as construction, consumer products, industrial applications, and transportation.
In the third quarter of 2024, PPG Industries Inc. (NYSE:PPG) achieved record earnings per diluted share (EPS) of $2.00, with adjusted EPS reaching $2.13. The third quarter marked the seventh straight quarter of growth in adjusted EPS for the company. The company reported positive volume growth across seven of its ten business segments. Net sales totaled $4.6 billion.
The company is focused on enhancing shareholder value. It repurchased approximately $200 million of stock during Q3 2024 and a total of about $500 million year-to-date. In July, PPG Industries Inc. (NYSE:PPG) increased its quarterly dividend by 5%, distributing around $160 million in dividends for the quarter and approximately $465 million year-to-date.
PPG Industries Inc.’s (NYSE:PPG) ongoing strategic initiatives include the planned closure of its silicas products business and its architectural coatings segment in the US and Canada. These two divestitures are part of the company’s enterprise growth strategy, allowing it to focus on areas with the highest growth potential and margins. By optimizing its portfolio, PPG aims to channel resources into segments where it has a competitive advantage.
With a commitment to returning value to shareholders and a clear strategy for growth, PPG Industries Inc. (NYSE:PPG) represents a solid investment opportunity in the chemical sector. As of the second quarter of 2024, the stock is held by 42 hedge funds. It ranks second on our list of undervalued chemical stocks to invest in.
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.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock
Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
