AXTA - Embedded Expectations Analysis - 2019 11 06
Axalta Coating Systems (AXTA:USA) currently trades below historical averages relative to UAFRS-based (Uniform) Earnings, with a 16.7x Uniform P/E. At these levels, the market expects Uniform ROA to remain stable, and management may be concerned about their cost structure, guidance, and end markets.Specifically, management is confident their updated global production guidance decreased by 4.1% for Asia Pacific, and they may be concerned about the value of their recent share repurchases. Furthermore, they may lack confidence in their ability to sustain recent EBIT improvements and positive pricing impacts in their Light Vehicle business. Moreover, they may lack confidence in their ability to improve their cost structure, and they may be concerned about their ability to take price to offset inflation. Finally, they may be concerned about the sustainability of repair shop demand in their Refinish business, and they may be concerned about their ability to drive adoption for their solvent-borne solutions.
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