Seeking alpha

Article 1 :

1. The chemicals sector is facing several headwinds at this moment mostly driven by a weak macroeconomic outlook, high natural gas prices in Europe driving up feedstock prices and energy costs and oversupply from Chinese competitors putting pressure on pricing. 
2. Akzo stock has lost only 5% in the last 12 months, while other chemical peers have seen significantly larger drops in share price. This is because the company is in paints and coatings segment which typically comes at a higher margin than other chemical business.
3. The Decorative paints business is consumer led while coating business is industrial focused. So, the current weak macro environment affect renovation and construction spending leading to weakness in China and Europe. Industrial segment is also seeing some headwinds , due to which there are delays in capital expenditures and postpones of coatings projects.

Growth Opportunities

1. Entering Emerging markets (risk of competition)
2. Aerospace coatings, supported by robust defense spending and other electrification and energy projects.

About Company

1. Overall business is offsetting volumes declines through pricing and mix. However, major drag on the sales has been the currency exchange rates.
2. Decorative paints results have held up better than the coatings segment.

Conclusion

1. Not a high growth company from EBITDA perspective (4.6% CAGR between 2024 -27). However FCF growth expected to be 23.8% (led by company’s effort to structurally cut costs from the business). This leads  a buy rating at $114.58 price indicating 64% upside for the ordinary shares.

Article 2 :

Comapny

1. 3rd largest producer of paints and coatings (with well diversified international base)
2. Part of the issue with company is that it is too diverse, as it still manufactures salt for cooking and dealing with slipper roads.
3. Company’s recent years growth has more of inorganic. Recent moves include acquiring Valspar and Grupo Orbis.
4. Tariff risk is there, but company already has operations in the US. This makes company more attractive as compared to its peers

North American Market

1. PPG and SHW (Sherwin Williams) are the leading  paint brands.
2. SHW owns 2 of 5 top leading brands in North America.

Article 3 :

1. First quarter is traditionally pretty weak given the seasonality of the business.

Thesis

1. Combination of higher revenue and anticipated margin expansion by 2027 are the main reasons that make Akzo nobel stock interesting.