Analyst Note| Krzysztof Smalec, CFA |
We are raising our fair value estimate for narrow-moat-rated Air Products after the industrial gas firm reported its fiscal second-quarter results. We were encouraged to hear positive updates on the status of two large gasification projects: (1) Lu’An has asked Air Products to restart the facility; and (2) Air Products is now optimistic that the Jazan transaction will close during fiscal 2021. After updating our estimates, we are bumping our fair value estimate for Air Products to $317 from $297. Earlier this year, we saw the name as undervalued as market sentiment turned around against the company due to question marks around Lu’An and Jazan, but the stock is now back in 3-star territory.