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Investing.com - BofA Securities downgraded Air Liquide (EPA:AIRP) SA (EPA:AI) (OTC:AIQUY) from Buy to Underperform on Monday, while lowering its price target to EUR175.00 from EUR200.00.
The downgrade comes as BofA identifies signs of delay and diminished ambition in the energy transition megatrend, which forms part of Air Liquide’s organic growth strategy. The firm notes this development creates reason for vigilance despite the company’s defensive qualities and track record.
BofA points to Air Liquide’s current valuation of approximately 24 times 2026 estimated price-to-earnings ratio, which sits near an all-time high multiple relative to the wider SXXP index. The firm suggests this premium valuation would only be justified by noticeably faster and more profitable growth compared to historical performance.
The research firm forecasts a robust 7.4% EBIT CAGR for Air Liquide between 2024-2030, which it notes is not significantly different from the 7.2% delivered over the previous decade. BofA’s estimates now stand 3-4% below consensus for 2029-2030 EBIT.
BofA also acknowledges that industry consolidation and a shift in company culture are contributing to higher margins, but notes that expectations have already been rebased higher for the next two years following the latest guidance from Air Liquide.
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