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Air Products & Chemicals Inc APD

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Air Products Has a Long Runway for Growth; Raising Fair Value Estimate

Analyst Note

| Krzysztof Smalec, CFA |

Air Products’ fiscal third-quarter adjusted EPS decreased 7% from the prior-year period, as management estimates that COVID-19 had a roughly $0.35 to $0.40 negative impact on earnings. Despite near-term headwinds, we think Air Products’ solid results highlight the resilience of the firm’s business model, as on-site sales have held up well and merchant pricing remains strong. We are raising our fair value estimate to $305 from $246, which reflects more optimistic long-term revenue growth projections. We have raised our stage II EBI growth rate assumption as we believe that Air Products has a long runway for growth fueled by its capital deployment plan and continued strong execution.

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Company Profile

Business Description

Since its founding in 1940, Air Products has become one of the leading industrial gas suppliers globally, with operations in 50 countries and 19,000 employees. The company is the largest supplier of hydrogen and helium in the world. It has a unique portfolio serving customers in a number of industries, including chemicals, energy, healthcare, metals, and electronics. Air Products generated $8.9 billion in revenue in fiscal 2019.

7201 Hamilton Boulevard
Allentown, PA, 18195-1501
T +1 610 481-4911
Sector Basic Materials
Industry Chemicals
Most Recent Earnings Jun 30, 2020
Fiscal Year End Sep 30, 2020
Stock Type Cyclical
Employees 17,700