Axalta Q4 profit misses expectations as costs rise

Overview

• Coatings company's Q4 net sales slightly missed analyst expectations, declining 4% yr/yr

• Adjusted EPS for Q4 missed analyst expectations

• Company announced merger agreement with AkzoNobel, expected to close in late 2026 or early 2027

Outlook

• Axalta projects Q1 2026 adjusted EBITDA between $240 mln and $250 mln

• Company expects FY 2026 adjusted diluted EPS between $2.55 and $2.70

• Axalta anticipates FY 2026 free cash flow to exceed $500 mln

Result Drivers

• LOWER VOLUMES - Q4 net sales decreased 4% yr/yr due to lower volumes, particularly in North America and Europe, partially offset by favorable foreign currency and positive price-mix in Mobility Coatings

• HIGHER TAX EXPENSE - Net income decline driven by higher income tax expense and increased merger-related costs, partially offset by reduced SG&A and interest expenses

• MOBILITY COATINGS GROWTH - Mobility Coatings net sales increased 1% due to positive price-mix and cost-saving initiatives, despite volume declines

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 9 "strong buy" or "buy", 8 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the commodity chemicals peer group is "buy"

• Wall Street's median 12-month price target for Axalta Coating Systems Ltd is $35.50, about 3.8% above its February 9 closing price of $34.21

• The stock recently traded at 13 times the next 12-month earnings vs. a P/E of 11 three months ago

Press Release: ID:nGNX1mqhzN

For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.