AkzoNobel Earnings: Tepid Decorative Paint Demand Continues to Pressure Volume and Price Growth

Narrow-moat-rated AkzoNobel reported somewhat underwhelming fourth-quarter results as it continued to navigate mixed end-market demand. Net sales rose roughly 3.5% year over year, driven by gains from both segments. Akzo benefited from favorable foreign-currency exchange in the quarter, as consolidated volume was largely flat and selling prices rose roughly 1% from a year ago. While we are encouraged by strength in end markets like powder coatings and marine, we think headwinds in China, automotive, and general industrial will persist for at least the next few quarters, slowing growth. As such, we are maintaining our EUR 66 fair value estimate.