Company Reports

Wide-moat-rated Linde posted solid first-quarter results, as its adjusted EPS of $3.75 came in above management’s $3.58-$3.68 guidance. However, the second-quarter outlook of $3.70-$3.80 fell short of the $3.88 FactSet consensus estimate, sending shares down nearly 6% in intraday trading on May 2. We’ve trimmed our fair value estimate to $420 from $425, which reflects our slightly more conservative near-term revenue growth projections.

Linde is the largest industrial gas producer in the world and benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, industrial gas companies have consistently delivered lucrative returns thanks to their economic moats. Industrial gases typically account for a relative fraction of customers’ costs but are a vital input to ensure uninterrupted production. As such, customers are often willing to pay a premium and sign long-term contracts to ensure that their businesses are running smoothly. Long-term contracts and high switching costs contribute to industrial gas producers' moats, helping them generate a relatively predictable cash flow stream and lucrative returns.

After taking a fresh look at industrial gas firms, we are upgrading our moat ratings for Air Liquide, Air Products, and Linde to wide from narrow, based on switching costs and intangible assets. The moat upgrade boosts our fair value estimates to EUR 185 from EUR 162 for Air Liquide, to $307 from $288 for Air Products, and to $425 from $398 for Linde.

Linde is the largest industrial gas producer in the world and benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, industrial gas companies have consistently delivered lucrative returns thanks to their economic moats. Industrial gases typically account for a relative fraction of customers’ costs but are a vital input to ensure uninterrupted production. As such, customers are often willing to pay a premium and sign long-term contracts to ensure that their businesses are running smoothly. Long-term contracts and high switching costs contribute to industrial gas producers' moats, helping them generate a relatively predictable cash flow stream and lucrative returns.

Linde is the largest industrial gas producer in the world and benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, industrial gas companies have consistently delivered lucrative returns thanks to their economic moats. Industrial gases typically account for a relative fraction of customers’ costs but are a vital input to ensure uninterrupted production. As such, customers are often willing to pay a premium and sign long-term contracts to ensure their businesses are running smoothly. Long-term contracts and high switching costs contribute to industrial gas producers' moats, helping them generate a relatively predictable cash flow stream and lucrative returns.

Narrow-moat Linde finished 2023 on a strong note, as its full-year revenue of $32.9 billion and adjusted EPS of $14.20 both beat our estimates of $32.8 billion and $14.09, respectively. After rolling our model forward one year, we've raised our fair value estimate to $398 from $393, which reflects our slightly more optimistic operating margin projections as well as time value of money.

Linde is the largest industrial gas producer in the world and benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, industrial gas companies have consistently delivered lucrative returns thanks to their economic moats. Industrial gases typically account for a relative fraction of customers’ costs but are a vital input to ensure uninterrupted production. As such, customers are often willing to pay a premium and sign long-term contracts to ensure their businesses are running smoothly. Long-term contracts and high switching costs contribute to industrial gas producers' moats, helping them generate a relatively predictable cash flow stream and lucrative returns.

Narrow-moat-rated Linde delivered strong third-quarter results, featuring a 17% year-over-year increase in adjusted EPS, and raised its full-year guidance for the third time this year. Management now anticipates adjusted EPS of $14.00-$14.10 (up from $13.80-$14.00), which assumes no economic improvement in the fourth quarter at the top end of the range. We’ve raised our fair value estimate to $393 from $379, which reflects our more optimistic operating margin assumptions and time value of money.

Narrow-moat-rated Linde posted solid second-quarter results, featuring a 15% year-over-year increase in adjusted EPS, from $3.10 to $3.57, and raised its full-year outlook for the second time this year. We’ve increased our fair value estimate to $379 from $365, which reflects our slightly more optimistic operating margin assumptions and time value of money.

Linde is the largest industrial gas producer in the world and benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, industrial gas companies have consistently delivered lucrative returns thanks to their economic moats. Industrial gases typically account for a relative fraction of customers’ costs but are a vital input to ensure uninterrupted production. As such, customers are often willing to pay a premium and sign long-term contracts to ensure their businesses are running smoothly. Long-term contracts and high switching costs contribute to industrial gas producers' moats, helping them generate a relatively predictable cash flow stream and lucrative returns.

Narrow-moat-rated Linde started 2023 with a strong first quarter, delivering a 17% year-over-year increase in adjusted EPS, from $2.93 to $3.42. We’ve increased our fair value estimate to $365 from $359, driven by our slightly more optimistic revenue growth projections as well as time value of money.

Linde is the largest industrial gas producer in the world and benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, industrial gas companies have consistently delivered lucrative returns thanks to their economic moats. Industrial gases typically account for a relatively small fraction of customers’ costs but are a vital input to ensure uninterrupted production. As such, customers are often willing to pay a premium and sign long-term contracts to ensure their businesses are running smoothly. Long-term contracts and high switching costs contribute to industrial gas producers' moats, helping them generate a relatively predictable cash flow stream and lucrative returns.

Narrow-moat-rated Linde ended 2022 with a strong fourth quarter, as its full-year 2022 adjusted EPS of $12.29 beat our estimate by $0.26. After rolling our model forward one year, we’ve increased our fair value estimate for the industrial gas firm to $359 from $347, which reflects our more optimistic operating margin assumptions as well as time value of money.

Linde is the largest industrial gas producer in the world and benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, industrial gas companies have consistently delivered lucrative returns thanks to their economic moats. Industrial gases typically account for a relatively small fraction of customers’ costs but are a vital input to ensure uninterrupted production. As such, customers are often willing to pay a premium and sign long-term contracts to ensure their businesses are running smoothly. Long-term contracts and high switching costs contribute to industrial gas producers' moats, helping them generate a relatively predictable cash flow stream and lucrative returns.

We increase our fair value estimate for narrow-moat Linde to $347 from $340 after the industrial gas firm reported strong third-quarter results, posting a 14% year-over-year increase in adjusted EPS, to $3.10 from $2.73. The fair value increase is driven by our revised near-term expectations as well as time value of money.

Linde is the largest industrial gas producer in the world and benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, industrial gas companies have consistently delivered lucrative returns thanks to their economic moats. Industrial gases typically account for a relatively small fraction of customers’ costs but are a vital input to ensure uninterrupted production. As such, customers are often willing to pay a premium and sign long-term contracts to ensure their businesses are running smoothly. Long-term contracts and high switching costs contribute to industrial gas producers' moats, helping them generate a relatively predictable cash flow stream and lucrative returns.

We are raising our fair value estimate for narrow-moat-rated Linde to $340 from $333 after the industrial gas firm posted strong second-quarter results, delivering a 15% year-over-year increase in adjusted EPS, from $2.70 to $3.10. Our fair value estimate increase reflects Linde’s solid performance, our slightly more optimistic near-term revenue growth and operating margin assumptions, and the time value of money.

Linde is the largest industrial gas producer in the world and benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, industrial gas companies have consistently delivered lucrative returns thanks to their economic moats. Industrial gases typically account for a relatively small fraction of customers’ costs but are a vital input to ensure uninterrupted production. As such, customers are often willing to pay a premium and sign long-term contracts to ensure their businesses are running smoothly. Long-term contracts and high switching costs contribute to industrial gas producers' moats, helping them generate a relatively predictable cash flow stream and lucrative returns.

Narrow-moat-rated Linde posted strong first-quarter results, featuring 13% sales growth and an 18% increase in adjusted EPS from the same period last year. Management raised its full-year 2022 guidance and now expects adjusted EPS in the range of $11.65-$11.90, up from $11.55-$11.85 previously. We’ve raised our fair value estimate for Linde to $333 from $325, which reflects the firm’s strong first-quarter results as well as time value of money.

Linde is the largest industrial gas producer in the world and benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, industrial gas companies have consistently delivered lucrative returns thanks to their economic moats. Industrial gases typically account for a relatively small fraction of customers’ costs but are a vital input to ensure uninterrupted production. As such, customers are often willing to pay a premium and sign long-term contracts to ensure their businesses are running smoothly. Long-term contracts and high switching costs contribute to industrial gas producers' moats, helping them generate a relatively predictable cash flow stream and lucrative returns.