Air Products and Chemicals, Inc. (APD), headquartered in Allentown, Pennsylvania, is a prominent global supplier of industrial gases, technology, and services, with a market cap of $59.7 billion. Serving diverse industries such as refining, chemicals, metals, electronics, and manufacturing, APD is recognized for its innovative solutions and extensive portfolio, contributing significantly to sustainable energy and industrial efficiency.
Companies worth $10 billion or more are generally considered "large-cap" stocks, and Air Products and Chemicals exemplifies this category, signifying its substantial size, stability, and dominance in the industrial gases and chemicals sector.
APD stands out as the largest supplier of hydrogen and helium, and it is known for its reliability and innovation. With a global presence and focus on clean hydrogen projects, APD strengthens its market leadership. Besides, its growth strategy focuses on expanding its core industrial gases business and advancing clean hydrogen projects, aligning with global sustainability trends and positioning it for future growth.
Despite its notable strengths, shares of Air Products have dropped 12.7% from their 52-week high of $307.71, reached on Sep. 15, 2023. Over the past three months, APD's shares have dipped marginally, underperforming the broader Dow Jones Industrial Average Index’s ($DOWI) 3.8% return over the same time frame.
In the longer term, APD has plunged 1.9% on a YTD basis and 8.4% over the past 52 weeks. In comparison, the DOWI has surged 7.1% in 2024 and 17.1% over the past year.
Despite the grim price action, APD has been trading above its 50-day moving average since early August and its 200-day moving average since late July, indicating a recent bullish trend.
Shares of APD surged more than 8% after the company reported strong Q3 earnings, easing investor concerns following earlier declines. While revenue of $2.99 billion fell slightly short of the $3.04 billion analysts expected, adjusted EPS of $3.20 exceeded both analyst estimates and management forecasts. The company reaffirmed its 2024 adjusted EPS outlook of $12.20 to $12.50, signaling a potential 7.3% increase over 2023.
Additionally, Air Products announced plans to develop a hydrogen refueling network in California and partner with Mercedes-Benz for hydrogen-powered vehicle distribution, further fueling investor enthusiasm.
Air Products and Chemicals faces strong competition in the industrial gas sector, particularly from Linde PLC (LIN), which is known for its gas and engineering services. Linde has outperformed both APD and DOWI in 2024, with YTD gains of 11.2% and a 19.2% increase over the past 52 weeks.
Despite its recent underperformance, analysts are cautiously optimistic about APD's prospects. The stock has a consensus rating of "Moderate Buy" from 19 analysts in coverage. The mean price target of $300.21 reflects an 11.7% premium over current levels.
On the date of publication, Kritika Sarmah 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.
