Air Products stock target raised to $417 by Jefferies

On Friday, Jefferies analyst Laurence Alexander increased the price target for Air Products & Chemicals Inc. (NYSE:APD) shares to $417 from the previous $390, while maintaining a Buy rating on the stock. Alexander anticipates a gradual unveiling of the company's updated strategic plan and approach to mitigating risks associated with their project backlog.

Alexander's (NYSE:ALX) statement highlighted expectations for the company's future: "We expect a slow reveal as new management updates the strategic plan and path for derisking the backlog: adjectives first, concrete details later." He outlined potential narrative elements and execution challenges that could potentially double the stock price in 5-7 years, and even triple it in 7-10 years, given a more aggressive strategy that remains realistic based on historical precedents and the performance of industry peers. The company's strong track record includes maintaining dividend payments for 55 consecutive years, demonstrating consistent financial stability.

According to Alexander, the projections are not just speculative but are based on a solid foundation: "We sketch narrative elements and execution hurdles that would support 2x the share price in 5-7 years, and ingredients for 3x in 7-10 years: more aggressive, but still grounded in precedent and peer performance." The stock has already demonstrated strong momentum, with a 49.09% return over the past year and a 9.33% gain year-to-date.

The analyst also provided a timeline for when investors might expect Air Products to outperform its industrial gas peers. He said, "In our base case, the next window for outperformance relative to industrial gas peers will be 2H25-2026." This suggests that the company's efforts and strategic updates may start to significantly bear fruit in the second half of 2025, extending into the following year.

Air Products & Chemicals Inc. is known for its focus on industrial gases, which are critical for various industries, including energy, electronics, chemicals, and refining. The company's performance and strategic decisions are closely watched by investors interested in the industrial gas sector.

In other recent news, Air Products & Chemicals Inc. faced a series of analyst rating changes following its first-quarter performance and future outlook. BMO Capital Markets downgraded the stock from Outperform to Market Perform and lowered the price target to $346 due to concerns of the company not achieving its financial targets for fiscal year 2025. Similarly, JPMorgan analysts downgraded the stock from 'Overweight' to 'Neutral' and reduced the price target to $320, citing potential risks in the company's earnings growth.

Air Products reported first-quarter earnings per share (EPS) of $2.86, slightly above the analyst estimate, but revenues fell short at $2.93 billion. The company forecasts an adjusted EPS range of $2.75 to $2.85 for the second quarter of fiscal 2025, below the consensus estimate. Despite these results, UBS analyst Joshua Spector maintained a Buy rating for the stock and increased the price target to $385, citing positive catalysts anticipated to bolster investor confidence.

In addition to these developments, Air Products announced amendments to its corporate bylaws and changes in its board leadership structure. The board approved an amendment to include the role of Vice Chairman and appointed Wayne T. Smith as its Chairman and Dennis H. Reilley as its Vice Chairman. This move is part of a broader effort to enhance the company’s governance framework.

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