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.
Management raised its long-term operating margin target. It now aims to boost operating margin by 320 basis points from 2021 levels by 2025, doubling its previous target of 160 basis points.
Compared with peers, Air Liquide has a larger exposure to Europe, which has been experiencing slower growth than other regions.
|
Metric
|
AI
|
PPG
|
LIN
|
|---|---|---|---|
Price/Earnings (Normalized) | 30.00 | 17.41 | 31.45 |
Price/Book Value | 4.04 | 4.01 | 5.43 |
Price/Sales | 3.57 | 1.74 | 6.70 |
Price/Cash Flow | 17.14 | 15.10 | 22.48 |
|
Metric
|
AI
|
PPG
|
LIN
|
|---|---|---|---|
Quick Ratio | 0.51 | 0.96 | 0.62 |
Current Ratio | 0.87 | 1.47 | 0.80 |
Interest Coverage | 56.89 | 7.51 | 19.83 |
|
Metric
|
AI
|
PPG
|
LIN
|
|---|---|---|---|
Return on Assets (Normalized) | 6.80% | 8.42% | 8.80% |
Return on Equity (Normalized) | 13.97% | 24.67% | 17.60% |
Return on Invested Capital (Normalized) | 8.86% | 12.67% | 11.96% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
LIN
| Linde PLC | Tpvfxbfbx | Tpr | $215.3 Bil | |
SHW
| Sherwin-Williams Co | Xncmzxywn | Wwpx | $77.7 Bil | |
ECL
| Ecolab Inc | Pmkyvlvrcy | Rtyt | $62.7 Bil | |
APD
| Air Products & Chemicals Inc | Nrrgmltmr | Vwvw | $52.1 Bil | |
LYB
| LyondellBasell Industries NV Class A | Tfmdvtfc | Qzpvqfv | $32.3 Bil | |
DD
| DuPont de Nemours Inc | Rttjznw | Jxynxxw | $30.9 Bil | |
PPG
| PPG Industries Inc | Bxhlrqt | Zzcdfl | $30.8 Bil | |
IFF
| International Flavors & Fragrances Inc | Jppzhyj | Xts | $21.7 Bil | |
ALB
| Albemarle Corp | Mzmmcykj | Cjrfl | $13.2 Bil | |
SQM
| Sociedad Quimica Y Minera De Chile SA ADR | Kgnvvvy | Bdlms | $12.6 Bil |
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