Company Reports

Air Products' fiscal third-quarter adjusted EPS of $3.47 beat the FactSet consensus estimate by $0.13. GAAP results included a $2.9 billion, or $9.92 per share, pretax charge related to terminating the Louisiana project as well as other smaller clean energy projects, which was announced on June 30.

Air Products benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, publicly traded industrial gas companies have consistently delivered lucrative returns due 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 run smoothly. Long-term contracts and high switching costs contribute to industrial gas producers’ moats, helping them generate a predictable cash flow stream and lucrative returns.

Air Products has decided to exit its blue hydrogen megaproject in Louisiana. The company expects to record pretax charges of up to $2.9 billion in the fiscal third quarter associated with terminating the Louisiana project as well as several other smaller clean energy projects.

Air Products' fiscal second-quarter adjusted earnings per share increased 19% year over year to $3.20, beating the FactSet consensus estimate by $0.14.

Air Products benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, publicly traded industrial gas companies have consistently delivered lucrative returns due 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 run smoothly. Long-term contracts and high switching costs contribute to industrial gas producers’ moats, helping them generate a predictable cash flow stream and lucrative returns.

Air Products delivered solid fiscal first-quarter results, as its adjusted earnings per share of $3.16 beat the FactSet consensus estimate by $0.12. Management reiterated its fiscal 2026 guidance and continues to anticipate full-year adjusted EPS of $12.85-$13.15.

Air Products benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, publicly traded industrial gas companies have consistently delivered lucrative returns due 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 run smoothly. Long-term contracts and high switching costs contribute to industrial gas producers’ moats, helping them generate a predictable cash flow stream and lucrative returns.

Air Products announced it is in negotiations to form a partnership with Yara International, the largest global shipper of ammonia, to integrate Air Products' low-emission ammonia projects in Louisiana and Saudi Arabia into Yara's distribution network.

Air Products benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, public industrial gas companies have consistently delivered lucrative returns because of 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 run smoothly. Long-term contracts and high switching costs contribute to industrial gas producers’ moats, helping them generate a predictable cash flow stream and lucrative returns.

Air Products' shares rallied by roughly 9% after the company reported solid fiscal fourth-quarter results and initiated fiscal 2026 adjusted earnings per share guidance of $12.85-$3.15, above the FactSet consensus estimate of $12.88 at the midpoint.

Air Products benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, public industrial gas companies have consistently delivered lucrative returns because of 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 run smoothly. Long-term contracts and high switching costs contribute to industrial gas producers’ moats, helping them generate a predictable cash flow stream and lucrative returns.

Air Products' fiscal third-quarter adjusted earnings per share of $3.09 beat the FactSet consensus estimate by $0.10, despite a 4% year-over-year decline in volume. Management narrowed its fiscal 2025 outlook by a nickel on both ends and now anticipates full-year adjusted EPS of $11.90-$12.10.

Air Products benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, public industrial gas companies have consistently delivered lucrative returns because of 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 run smoothly. Long-term contracts and high switching costs contribute to industrial gas producers’ moats, helping them generate a predictable cash flow stream and lucrative returns.

After taking a fresh look at industrial gas firms, we've updated our Morningstar Capital Allocation Ratings: upgraded Linde from Standard to Exemplary, downgraded Air Products from Exemplary to Standard, and maintained Air Liquide at Standard. We've maintained our fair value estimates and wide moat ratings for all three companies.

Air Products benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, public industrial gas companies have consistently delivered lucrative returns because of 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 run smoothly. Long-term contracts and high switching costs contribute to industrial gas producers’ moats, helping them generate a predictable cash flow stream and lucrative returns.

We’ve lowered our fair value estimate for wide-moat Air Products to $318 from $333 per share following fiscal second-quarter results, which reflects our more conservative near-term projections amid tariff-related uncertainty and lower expected contribution from underperforming projects. Adjusted earnings per share of $2.69 was down 6% year over year and came in below management’s guidance range of $2.75-$2.85.

Air Products benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, public industrial gas companies have consistently delivered lucrative returns because of 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 run smoothly. Long-term contracts and high switching costs contribute to industrial gas producers’ moats, helping them generate a predictable cash flow stream and lucrative returns.

On April 2, President Donald Trump announced a 10% baseline tariff on all imports into the United States, with higher rates on imports from select countries. We are keeping our fair value estimates unchanged for the three wide-moat industrial gas firms under our coverage: EUR 187 for Air Liquide, $333 for Air Products, and $437 for Linde. After the tariff announcement sent the market down, Air Products' shares looks the most attractive from a valuation perspective, trading at a roughly 14% discount to our fair value estimate.

We’re maintaining our $333 fair value estimate for Air Products after the wide-moat industrial gas firm reported solid fiscal first-quarter results, as its adjusted EPS of $2.86 came in a penny above management’s guidance range of $2.75 to $2.85. After a roughly 50% run over the last year, we now see the stock as fairly valued, as we believe that the successful activist campaign has largely dispelled the market’s concerns about Air Products’ hydrogen backlog.

Air Products benefits from operating in an industry with a very favorable structure. Despite selling industrial gases, which are essentially commodities, public industrial gas companies have consistently delivered lucrative returns because of 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 run smoothly. Long-term contracts and high switching costs contribute to industrial gas producers’ moats, helping them generate a predictable cash flow stream and lucrative returns.