Earnings Miss: Axalta Coating Systems Ltd. Missed EPS By 16% And Analysts Are Revising Their Forecasts
Last week, you might have seen that Axalta Coating Systems Ltd. (NYSE:AXTA) released its yearly result to the market. The early response was not positive, with shares down 4.0% to US$31.33 in the past week. It was not a great result overall. While revenues of US$5.2b were in line with analyst predictions, earnings were less than expected, missing statutory estimates by 16% to hit US$1.21 per share. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Axalta Coating Systems after the latest results.
Check out our latest analysis for Axalta Coating Systems
Following the latest results, Axalta Coating Systems' 17 analysts are now forecasting revenues of US$5.31b in 2024. This would be a reasonable 2.5% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 47% to US$1.79. Before this earnings report, the analysts had been forecasting revenues of US$5.35b and earnings per share (EPS) of US$1.84 in 2024. The analysts seem to have become a little more negative on the business after the latest results, given the small dip in their earnings per share numbers for next year.
The consensus price target held steady at US$36.44, with the analysts seemingly voting that their lower forecast earnings are not expected to lead to a lower stock price in the foreseeable future. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Axalta Coating Systems analyst has a price target of US$42.00 per share, while the most pessimistic values it at US$30.00. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Axalta Coating Systems' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 2.5% growth on an annualised basis. This is compared to a historical growth rate of 3.2% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.2% per year. Factoring in the forecast slowdown in growth, it seems obvious that Axalta Coating Systems is also expected to grow slower than other industry participants.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Axalta Coating Systems' revenue is expected to perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that said, the long-term trajectory of the company's earnings is a lot more important than next year. At Simply Wall St, we have a full range of analyst estimates for Axalta Coating Systems going out to 2026, and you can see them free on our platform here..
You should always think about risks though. Case in point, we've spotted 2 warning signs for Axalta Coating Systems you should be aware of, and 1 of them is a bit unpleasant.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
