Axalta Coating Systems Is A Focused Franchise

"Franchise structurally improved. Specifically, and built on a focus to overhaul the cost structure and create a leaner enterprise, the combined cost optimization initiatives ($200 million in aggregate savings through 2017) are well on track, with incremental upside likely through 2020 as the next phase of platform adjustments get underway (reduced SKU complexity, etc.)," Baird said.

Related Link: Axalta Reports Sale Of 25 Million Shares Of Common Stock Via Affiliates Of Carlyle

Despite an unfavorable macro environment, particularly in Latin America, analysts are optimistic about the company because of the potential growth initiatives. These initiatives will be seen mainly in auto refinish and industrial in the second half of 2016, which constitute 42 percent and 15 percent of total sales, respectively.

According to the analysts, investors are probably underestimating the internal momentum within the franchise, mentioning the following three catalysts: (1) debt refinancing, (2) bolt-on acquisitions and (3) an improving volume growth profile.

At time of writing, Axalta was down 6.16 percent on the day, trading at $26.30.