Air Products and Chemicals: A Strong Player in the Industrial Gas Sector
Air Products and Chemicals, Inc. (APD), based in Allentown, Pennsylvania, is a significant provider of atmospheric, process, and specialty gases along with related services. With a market cap of $71.2 billion, the company is involved in developing and managing some of the world’s largest industrial gas projects, including advanced gasification projects that produce high-value power, fuels, and chemicals.
Typically, companies valued at $10 billion or more fall into the large-cap category, and APD fits this definition perfectly. This solid market cap highlights its influence and role in the specialty chemicals sector. Operating in over 50 countries, APD benefits from diverse markets, offering a wide array of products, including industrial gases and performance materials. A strong commitment to research and development has propelled advancements in areas such as cryogenics and hydrogen fuel cells, which enhances its competitive stance.
However, APD recently experienced a decline, slipping 6% from its 52-week high of $337, achieved on December 3rd. Despite this, the stock has gained 15.6% over the past three months, outpacing the Materials Select Sector SPDR Fund (XLB), which rose by only 1.3% during the same period.
Looking at the long-term performance, APD’s shares have increased by 15.6% year-to-date (YTD) and climbed 20.3% over the last 52 weeks. In comparison, XLB returned just 7.4% YTD and 12.2% over the past year. Notably, APD has traded above its 200-day moving average since late May with some fluctuations, but has recently dipped below its 50-day moving average.
The company’s impressive performance can be attributed to its strategic choice to divest from its LNG business, reinforcing its focus on the industrial gas sector. Furthermore, APD’s commitment to providing clean hydrogen for heavy transportation and industrial applications aligns with the increasing demand for sustainable energy solutions.
On November 7, APD shares saw an increase of approximately 2% after the release of its Q4 financial results. The adjusted earnings per share (EPS) rose by 13% year over year, reaching $3.56, while revenue stood at $3.2 billion, showing a slight decline compared to the previous year.
In contrast, APD’s competitor, Linde plc (LIN), has seen less impressive stock performance with only a 7.8% gain YTD and 10.3% over the last 52 weeks.
Currently, Wall Street analysts hold a moderately positive view of APD, with a consensus “Moderate Buy” rating from 21 analysts. The average price target of $343.55 reflects a potential upside of 8.5% from current levels.
On the date of publication, Neha Panjwani did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
