Axalta adds to China portfolio
On August 11, 2017, Axalta (AXTA) introduced its waterborne refinish coating brand, Syrox, in China. The brand caters to domestic auto service companies and body shops. The brand includes a collection of more than 70,000 colors, and its color search software helps customers get their precise color quickly.
China is an important region for AXTA’s Asian growth. Zheng Xiaodong, business director of Axalta Refinishing China, said, “An innovative waterborne refinish coating, Syrox provides an integrated solution that is easy to use, of high quality, and sustainable to meet market demands across China. With Chinese automotive consumers’ growing demand for environmentally responsible auto repair and maintenance in response to stricter governmental legislation on emissions of VOCs, Axalta’s more sustainable Syrox refinish coating system is designed to satisfy the automotive maintenance and repair service sector.”
Axalta’s stock performance
Axalta stock rose 1.7% for the week ended August 11, 2017. The stock had fallen approximately 10.3% after disappointing 2Q17 earnings. AXTA’s gains have resulted in the stock recovering to trade above its 100-day moving average price. The stock was trading marginally above the 100-day moving average price of $28.38, giving indications of a possible turnaround. On a year-to-date basis, the stock has returned 5.6% while peers PPG Industries (PPG), Sherwin-Williams (SHW), and RPM International (RPM) have returned 6.3%, 23.5%, and -9.4%, respectively.
However, analysts see a target price of $32.67 over the next 12 months, implying a potential return of 15.7%. AXTA’s relative strength index of 40 indicates that the stock is neither overbought nor oversold.
Investors looking for exposure in AXTA can invest in the iShares U.S. Basic Materials ETF (IYM), which has invested 1.0% of its holdings in Axalta.