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Linde Delivers Strong Operating Margin Expansion in Q4; Raising Fair Value Estimate

Analyst Note

| Krzysztof Smalec, CFA |

Narrow-moat rated Linde maintained strong momentum in the fourth quarter, as the industrial gas firm’s sales of $7.3 billion and adjusted EPS of $2.30 both came in above FactSet consensus estimates ($7.1 billion and $2.16, respectively). Linde delivered an impressive 320-basis-point year-over-year adjusted operating margin improvement, fueled by price attainment and cost actions. After rolling our model forward one year, we’ve bumped our fair value estimate for Linde to $280 from $275, which reflects Linde’s strong operating margin performance, continued sequential improvement in volumes, and time value of money since our previous update.

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Company Profile

Business Description

Linde plc is the largest industrial gas supplier in the world, with operations in over 100 countries. The firm's main products are atmospheric gases (including oxygen, nitrogen, and argon) and process gases (including hydrogen, carbon dioxide, and helium), as well as equipment used in industrial gas production. Linde serves a wide variety of end markets, including chemicals, manufacturing, healthcare, and steel making. Linde generated approximately $27.2 billion in revenue and $3.3 billion in GAAP operating profit in 2020.

10 Priestley Road, The Priestley Centre
Guildford, Surrey, GU2 7XY, Ireland
T +44 1483242200
Sector Basic Materials
Industry Specialty Chemicals
Most Recent Earnings Dec 31, 2020
Fiscal Year End Dec 31, 2020
Stock Type
Employees 74,207