Linde plc Faces Market Challenges Despite Strong Fundamentals
Woking, United Kingdom-based Linde plc (LIN) is recognized as the preeminent player in the industrial gas and engineering sector, boasting a market capitalization of $217.2 billion. It specializes in providing essential industrial gases, advanced technologies, and gas processing solutions pivotal for producing clean hydrogen, carbon capture systems for energy transition, medical oxygen, and specialty gases used in electronics.
Stock Performance Trails Broader Market
Over the past year, LIN’s stock has struggled when compared to the overall market. While LIN shares increased by 12.3%, the S&P 500 Index ($SPX) surged nearly 32.3% during the same period. In 2024, LIN has seen a more modest rise of 10.4%, contrasted with the SPX’s robust 24.7% increase year to date (YTD).
When assessing LIN against the iShares U.S. Basic Materials ETF (IYM), the company appears to be faring somewhat better. The ETF has gained approximately 12.1% in the last year, yet LIN’s YTD return of over 10% notably exceeds the ETF’s 3.5% performance.
Q3 Results Reflect Underperformance Amidst Industry Weakness
Recently, LIN’s shares dipped over 3% following the release of its Q3 results, revealing revenues of $8.4 billion. This marked a 2.5% increase compared to the previous year. Notably, the company’s adjusted earnings per share (EPS) rose 8.5% year-over-year to $3.94. Looking ahead, LIN anticipates full-year adjusted EPS to fall between $15.40 and $15.50.
For the current fiscal year ending December, analysts expect LIN’s EPS to grow 9%, reaching $15.48 on a diluted basis. The company has a strong record of exceeding earnings expectations, having achieved this feat for the last four quarters, including a 1.3% outperformance against consensus estimates in the previous quarter.
Analyst Insights and Expectations
Among the 20 analysts following LIN, the consensus rating is a “Moderate Buy.” This is based on 13 “Strong Buy” recommendations, one “Moderate Buy,” and six “Hold” ratings.
Kepler Capital analyst Martin Roediger reaffirmed a “Hold” rating on LIN on October 31, setting a price target of $495, suggesting a potential upside of 9.2% from current prices.
The average price target of $508.12 indicates a 12% premium over LIN’s existing price, while the highest target of $550 implies a potential upside of 21.3% for investors.
On the date of publication, Neha Panjwani did not hold (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are for informational purposes only. For more details, please refer to the Barchart Disclosure Policy here.
The opinions expressed here are those of the author and do not necessarily reflect the views of Nasdaq, Inc.
