Core Viewpoint - The article emphasizes the importance of efficiency ratios in evaluating a company's potential for profitability and stock selection, highlighting that companies with high efficiency levels are expected to deliver better returns [1]. Efficiency Ratios - **Receivables Turnover**: This ratio measures a company's ability to extend credit and collect debts, with a higher ratio indicating better performance in managing accounts receivable [2]. - **Asset Utilization**: This ratio assesses how effectively a company converts its assets into sales, with higher values suggesting greater efficiency [3]. - **Inventory Turnover**: This ratio indicates a company's ability to manage inventory relative to its cost of goods sold (COGS), where a high ratio reflects efficient inventory management [4]. - **Operating Margin**: This ratio measures the proportion of revenue that remains after covering operating expenses, with higher values indicating better expense management [5]. Screening Criteria - The screening process included a favorable Zacks Rank of 1 (Strong Buy) alongside the efficiency ratios, narrowing down the stock universe from over 7,906 to just seven candidates [6][7]. Selected Stocks - **Embraer (ERJ)**: A company involved in designing and manufacturing aircraft, with an average four-quarter earnings surprise of 138.4% [8]. - **Steelcase (SCS)**: A designer and manufacturer of products for high-performance work environments, showing an average four-quarter earnings surprise of 31.5% [8]. - **Axalta Coating Systems (AXTA)**: A global coatings company with an average four-quarter earnings surprise of nearly 16.3% [9].

Core Viewpoint - Axalta Coating Systems (AXTA) is currently viewed as a better value opportunity compared to Hawkins (HWKN) based on Zacks Rank and various valuation metrics [1][3][6] Group 1: Zacks Rank and Earnings Estimates - Axalta Coating Systems has a Zacks Rank of 1 (Strong Buy), indicating a positive earnings outlook, while Hawkins has a Zacks Rank of 3 (Hold) [3] - The Zacks Rank emphasizes companies with positive earnings estimate revisions, suggesting that AXTA's earnings outlook is improving more significantly than HWKN's [3] Group 2: Valuation Metrics - AXTA has a forward P/E ratio of 13.70, significantly lower than HWKN's forward P/E of 26.53, indicating that AXTA may be undervalued [5] - The PEG ratio for AXTA is 0.89, while HWKN's PEG ratio is 3.79, further suggesting that AXTA is a more attractive investment based on expected earnings growth [5] - AXTA's P/B ratio is 3.83 compared to HWKN's P/B of 4.85, reinforcing the notion that AXTA is relatively undervalued [6] - Based on these metrics, AXTA holds a Value grade of B, while HWKN has a Value grade of D, indicating a stronger value proposition for AXTA [6]

Core Viewpoint - The article compares Axalta Coating Systems (AXTA) and Novozymes A/S (NVZMY) to determine which stock is more attractive to value investors [1] Valuation Metrics - AXTA has a forward P/E ratio of 14.40, while NVZMY has a forward P/E of 28.56 [5] - AXTA's PEG ratio is 0.93, indicating a more favorable valuation compared to NVZMY's PEG ratio of 2.93 [5] - AXTA has a P/B ratio of 4.04, significantly lower than NVZMY's P/B of 13.55 [6] Investment Ratings - AXTA currently holds a Zacks Rank of 1 (Strong Buy), while NVZMY has a Zacks Rank of 2 (Buy) [3] - AXTA has experienced stronger estimate revision activity compared to NVZMY, making it a more attractive option for value investors [7] Value Grades - AXTA has a Value grade of B, whereas NVZMY has a Value grade of F, indicating that AXTA is considered undervalued relative to its current share price [6]

Core Viewpoint - Axalta Coating Systems (AXTA) has been upgraded to a Zacks Rank 1 (Strong Buy) due to an upward trend in earnings estimates, indicating a positive outlook for the company's stock price [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system emphasizes the correlation between changes in earnings estimates and stock price movements, driven by institutional investors who adjust their valuations based on these estimates [4][6]. - Rising earnings estimates for Axalta Coating Systems suggest an improvement in the company's underlying business, which could lead to increased stock prices as investors respond positively [5][10]. Earnings Estimate Revisions - For the fiscal year ending December 2025, Axalta is expected to earn $2.52 per share, reflecting a 7.2% increase from the previous year [8]. - Over the past three months, the Zacks Consensus Estimate for Axalta has increased by 5%, indicating a positive trend in earnings expectations [8]. Zacks Rank System - The Zacks Rank system classifies stocks based on earnings estimate revisions, with only the top 5% receiving a 'Strong Buy' rating, highlighting Axalta's strong position in this regard [7][10]. - Historically, Zacks Rank 1 stocks have generated an average annual return of +25% since 1988, underscoring the effectiveness of the rating system [7].

Financing and Debt - The company is dependent on lenders for financing to execute its business strategy and meet liquidity needs, with risks intensifying if new debt is added [114]. - Difficult conditions in capital, credit, and commodities markets could materially adversely affect the company's financial condition and cash flows [116]. - The company may need to seek additional financing to compete effectively, as current cash and cash equivalents may not be sufficient [115]. - A substantial portion of the company's indebtedness bears interest at variable rates, increasing costs in elevated interest rate environments [120]. Shareholder Returns and Equity - The company has authorized a common share repurchase program of $700 million, with $600 million remaining available [126]. - The company does not expect to pay dividends on its common shares, making future appreciation in share value critical for investors [125]. - Future sales of common shares may dilute ownership and adversely affect the market price of the company's shares [127]. Tax and Legal Risks - The company may face significant tax and legal restrictions on the ability of foreign subsidiaries to remit funds, impacting cash flow [122]. - Changes in tax rates and legislation could adversely affect the company's effective tax rate and tax liabilities, with ongoing examinations by tax authorities posing additional risks [147]. Operational Risks - The company is vulnerable to disruptions in information technology systems, which could adversely affect its operations and financial condition [135]. - The company experienced temporary operational disruptions in North America due to the implementation of a new ERP system, negatively impacting net sales in the Performance Coatings segment during Q2 2023 [136]. - The ERP system is critical for timely management information, product delivery, customer support, invoicing, and maintaining accurate financial records, with potential failure leading to significant operational harm [137]. - The company faces increased risks from cybersecurity threats, which may require significant resources to enhance control measures, although no material adverse impacts have been reported to date [136]. Market and Economic Risks - Currency risk is significant as a large portion of net sales is derived from outside the U.S., with fluctuations in exchange rates potentially adversely affecting financial results [141]. - Geopolitical tensions and conflicts, such as the situation in Ukraine, may lead to economic uncertainties that could disrupt supply chains and adversely affect the company's operations [144]. Environmental, Social, and Governance (ESG) Considerations - Increasing scrutiny regarding ESG practices may impose additional compliance costs and expose the company to new risks, potentially impacting reputation and operational costs [150]. - The company has set 2030 ESG targets, with achievement dependent on operational strategies, which are subject to risks and uncertainties [151]. Financial Performance - Net sales for 2024 reached $5,276 million, an increase of 1.77% from $5,184 million in 2023 [321]. - Income from operations improved to $706 million in 2024, up 19.99% from $588 million in 2023 [321]. - Net income attributable to common shareholders was $391 million in 2024, compared to $267 million in 2023, reflecting a growth of 46.4% [321]. - Basic and diluted net income per share increased to $1.78 in 2024, up from $1.21 in 2023, representing a rise of 47.11% [321]. - Total assets decreased slightly to $7,249 million in 2024 from $7,272 million in 2023 [327]. - Total liabilities reduced to $5,293 million in 2024, down from $5,499 million in 2023 [327]. Acquisitions and Business Combinations - The acquisition of CoverFlexx was completed on July 2, 2024, for an aggregate purchase price of $290 million, enhancing the company's position in the refinish economy customer segment [392]. - Goodwill recognized from the CoverFlexx acquisition was $106 million, primarily attributed to the assembled workforce and anticipated future economic benefits [394]. - The company completed three strategic acquisitions in Europe during 2024, with an aggregate consideration of $15 million, impacting consolidated financial statements minimally [397]. Employee and Pension Obligations - The company has approximately 85% of its defined benefit pension obligation within the European region as of December 31, 2024 [417]. - The projected benefit obligation (PBO) decreased from $526 million in 2023 to $468 million in 2024, a reduction of approximately 11% [419]. - The accumulated benefit obligation (ABO) decreased from $502 million in 2023 to $447 million in 2024, a decline of about 11% [421]. - The net periodic benefit cost for 2024 was $15 million, unchanged from 2023, with service costs remaining at $6 million [424]. Insurance and Risk Management - The company maintains cybersecurity insurance covering security incident response expenses and certain losses due to network security failures [155]. - The company has recorded $29 million in estimated insurance receivables related to an operational matter as of December 31, 2024 [408].

Core Viewpoint - Axalta Coating Systems (NYSE: AXTA) has been consistently outperforming analyst estimates and is expected to maintain strong performance in the future [1] Company Performance - The company is recognized for its positive trajectory and is anticipated to continue delivering good results [1] Investment Focus - The investment strategy emphasizes value-focused opportunities, particularly in sectors such as chemicals, homebuilders, building materials, industrials, and metals & mining [1] - The preference is for stocks that are undervalued and have near-term catalysts [1] - The investment horizon is typically between one quarter to two years [1]

Core Viewpoint - Axalta Coating Systems Ltd. reported strong earnings growth in Q4 2024, surpassing expectations, with a notable increase in adjusted EBITDA and cash flow, despite some challenges in specific segments [1][2][5][6]. Financial Performance - Q4 2024 earnings per share (EPS) were 63 cents, up from 33 cents year-over-year, and adjusted EPS was 60 cents, up from 46 cents, exceeding the Zacks Consensus Estimate of 51 cents [1] - Revenues for Q4 2024 rose approximately 1% year-over-year to $1,311 million, beating the Zacks Consensus Estimate of $1,296.5 million, despite a 1% headwind from foreign currency fluctuations [2] - Adjusted EBITDA increased by 10% year-over-year to $275 million, with an adjusted EBITDA margin improvement of 170 basis points to 21% [2] Segment Performance - Performance Coatings unit sales decreased by around 1% year-over-year to $843 million, falling short of the consensus estimate of $857 million due to lower volumes and unfavorable currency impacts [3] - Mobility Coatings unit sales increased by approximately 4% year-over-year to $468 million, driven by strong light vehicle volume performance in China and Latin America, exceeding the consensus estimate of $438 million [4] Full-Year Results - For the full year 2024, Axalta reported earnings of $1.78 per share compared to $1.21 per share in the previous year, with net sales increasing around 2% year-over-year to $5.3 billion [5] Cash Flow and Debt - At the end of 2024, cash and cash equivalents stood at $593 million, a 15% increase year-over-year, while long-term debt decreased by roughly 2% to $3,401 million [6] - The company generated cash flow from operations of $576 million in 2024, slightly up from $575 million in the prior year [6] Outlook - For Q1 2025, Axalta expects adjusted EPS of approximately 54 cents and flat net sales year-over-year, with adjusted EBITDA forecasted at around $265 million [7] - For the full year 2025, adjusted EPS is projected to be in the range of $2.50-$2.60, with adjusted EBITDA expected between $1,150-$1,175 million and net sales forecasted at $5,350-$5,400 million [7] Stock Performance - Axalta's shares have increased by 17.2% over the past year, contrasting with a 16.3% decline in the Zacks Chemicals Specialty industry [8]

Axalta Coating Systems Fourth Quarter and Full Year 2024 Financial Results February 4, 2025 Beginning with the results for the fourth quarter and full year 2024 reported in this release, we have made changes to our presentation of the non-GAAP financial measures of Adjusted EBIT and Adjusted Net Income (which are also leveraged in the calculations of ROIC and Adjusted Diluted EPS, respectively). More detail on these changes can be found in the Current Report on Form 8-K we furnished to the U.S. Securities a ...

Axalta Coating Systems Ltd. (NYSE:AXTA) Q4 2024 Earnings Conference Call February 4, 2025 8:00 AM ET Company Participants Chris Villavarayan - Chief Executive Officer, President Carl Anderson - Chief Financial Officer Colleen Lubic - Vice President of Investor Relations Conference Call Participants Mike Leithead - Barclays Chris Parkinson - Wolf Research John McNulty - BMO Capital Markets Mike Sison - Wells Fargo Vincent Andrews - Morgan Stanley John Roberts - Mizuho Duffy Fischer - Goldman Sachs Ghansham P ...

Axalta Coating Systems (AXTA) reported $1.31 billion in revenue for the quarter ended December 2024, representing a year-over-year increase of 1.1%. EPS of $0.60 for the same period compares to $0.43 a year ago.The reported revenue represents a surprise of +1.12% over the Zacks Consensus Estimate of $1.3 billion. With the consensus EPS estimate being $0.51, the EPS surprise was +17.65%.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and how they compare to ...