Barclays lifts Air Products stock to Overweight, target to $365

On Thursday, Barclays (LON:BARC) analysts upgraded Air Products & Chemicals Inc. (NYSE:APD) stock rating from Equalweight to Overweight and increased the price target to $365 from $315. The upgrade reflects Barclays' positive outlook on the company, citing its position as a leading producer in the industrial gas sector, a robust base business, and a renewed focus on its core operations.

The analysts highlighted the recent changes in Air Products' board, with the addition of three Mantle Ridge-backed members, including Dennis Reilly. They also mentioned Eduardo Menezes, who is being considered as a potential successor for the CEO role, emphasizing their industrial gas expertise and ability to address investor concerns related to backlog, governance, and leadership. The company's strong fundamentals are reflected in its impressive 55-year track record of consecutive dividend payments, currently yielding 2.2%.

Barclays acknowledges that improvements at Air Products may not happen overnight but remains optimistic about the company's prospects. The firm's analysts believe that the industry's favorable fundamentals, combined with Air Products' strong business and leadership, are likely to contribute to long-term success and drive shareholder value.

The endorsement from Barclays comes at a time when Air Products is focusing on enhancing its operational efficiency and governance, which could potentially lead to increased investor confidence. The raised price target of $365 suggests that Barclays anticipates significant growth potential for the company's shares.

This upgrade by Barclays is an indicator of their confidence in Air Products' strategy and management team, positioning the company for potential gains in the market. With a market capitalization of $72 billion and analyst price targets ranging from $290 to $385, investors will be watching closely to see how Air Products capitalizes on its industry position. For deeper insights into APD's valuation and growth potential, InvestingPro subscribers can access comprehensive research reports and additional ProTips that could help inform investment decisions.

"In other recent news, Air Products reported robust preliminary earnings for the first quarter of fiscal year 2025, with an adjusted earnings per share (EPS) of $2.86, exceeding both the company's guidance and analyst consensus. In other significant developments, the company announced a CEO succession plan, expecting to appoint a new President by the end of March 2025, followed by a new CEO within three months.

In the company's recent Annual Meeting of Shareholders, a new slate of directors was elected to the board, including Andrew Evans, Paul Hilal, Bob Patel, Dennis Reilley, and Alfred Stern (AS:PBHP). These new members join existing directors, marking a significant change in the company's leadership.

Moreover, Mantle Ridge Capital Management secured three seats on the nine-member board of Air Products, concluding a highly contested board dispute. The Board has expressed concerns over Mantle Ridge's campaign, describing it as potentially disruptive to the company's progress and long-term strategy.

These recent developments highlight significant changes within the company's leadership and promising financial performance. As always, investors are encouraged to consider these earnings and revenue results as key indicators of the company's financial health. It is important to note that these figures are preliminary and subject to change upon the release of the full financial results."

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