- CreditSuisse Analyst John Robers initiated the reporting Axalta Coating Systems Ltd AXTA with an underperform rating and a Price target $20.
- Robers also initiated Univar Solutions Inc UNVR with an Outperform rating and a Price target $31.
- While they are not direct competitors, they are two of the largest companies with a regional business model and a focus on industrial markets.
- Given the prospect of a global economic downturn, he was cautious about AXTA given its strong presence in the automotive OEM (c.30% of sales) and general industry (c.30% of sales) end markets.
- The consensus expectation is that pent-up demand will support auto production in a potential downturn and rising rate environment, with any fall in volume offset by a fall in commodities (ie oil).
- He thought it more likely that this could be the first downturn without a drop in oil prices than the first downturn without a drop in auto production.
- Its EBITDA estimates for 2023 and 2024 are nearly 8% below consensus.
- Price promotion: AXTA shares traded 2.70% higher to $23.40 on the last check Friday.
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