Here's Why You Should Add Axalta Coating Stock to Your Portfolio Now

Core Insights - Axalta Coating Systems Ltd. (AXTA) has shown strong stock performance due to impressive earnings outperformance, upward revisions to earnings guidance, and robust performance across its business segments [1] Earnings Performance - AXTA has consistently surpassed the Zacks Consensus Estimate, achieving positive earnings surprises in each of the last four quarters, with an average surprise of 12.6% [2] - The Zacks Consensus Estimate for AXTA's 2024 earnings is $2.07, indicating a 31.9% increase compared to the previous year, with a forecasted growth of 14% in 2025 [3] Earnings Estimates Revision - In the last two months, the Zacks Consensus Estimate for AXTA's 2024 earnings has been revised upward by 4.5%, while the estimate for 2025 has increased by 4% [4] Stock Performance - Over the past year, Axalta's shares have increased by 28.5%, contrasting with a 10.2% decline in the industry [5] Financial Highlights - In Q2, Axalta reported a 63% year-over-year increase in adjusted earnings, with quarterly sales rising by 4.4% to $1.35 billion. Adjusted EBITDA surged to $291 million from $227 million, achieving an adjusted EBITDA margin of 21.5%, a 400-basis point improvement from the previous year [6] - The Performance Coatings segment saw a 4% increase in net sales, with adjusted EBITDA rising 23% year-over-year to $223 million and a margin of 25%. The Mobility Coatings segment experienced 6% net sales growth and a 47% increase in adjusted EBITDA, achieving a margin of 14.8%, up 440 basis points from the previous year [7] Strategic Initiatives - Axalta has raised its full-year 2024 outlook for adjusted EBITDA, adjusted EPS, and free cash flow, driven by strong Q2 performance and strategic initiatives aimed at enhancing profitability [7] - Recently, AXTA strengthened its Refinish business by acquiring The CoverFlexx Group, which generated $78 million in revenues in 2023 and adds a comprehensive range of automotive refinish and aftermarket coatings to Axalta's portfolio [8]