Axalta Coating Systems Ltd. (NYSE:AXTA) came out with its third-quarter results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks like a pretty bad result, all things considered. Although revenues of US$1.3b were in line with analyst predictions, statutory earnings fell badly short, missing estimates by 36% to hit US$0.44 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. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Following the latest results, Axalta Coating Systems' 17 analysts are now forecasting revenues of US$5.33b in 2027. This would be a satisfactory 3.0% improvement in revenue compared to the last 12 months. Per-share earnings are expected to bounce 65% to US$2.58. Before this earnings report, the analysts had been forecasting revenues of US$5.40b and earnings per share (EPS) of US$2.71 in 2027. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.
Check out our latest analysis for Axalta Coating Systems
It might be a surprise to learn that the consensus price target was broadly unchanged at US$38.88, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Axalta Coating Systems, with the most bullish analyst valuing it at US$47.00 and the most bearish at US$33.00 per share. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Axalta Coating Systems shareholders.
Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 2.4% growth on an annualised basis. That is in line with its 3.0% annual growth over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to see their revenues grow 4.8% per year. So although Axalta Coating Systems is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Axalta Coating Systems. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$38.88, with the latest estimates not enough to have an impact on their price targets.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Axalta Coating Systems analysts - going out to 2028, and you can see them free on our platform here.
Plus, you should also learn about the 1 warning sign we've spotted with Axalta Coating Systems .
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