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Tuesday, Air Products & Chemicals Inc. (NYSE:APD) shares maintained their Market Perform rating and a $346.00 price target by BMO Capital, following the company’s recent strategic decisions under new CEO Eduardo Menezes. Two weeks into his tenure, Menezes announced that Air Products will exit three projects, which will lead to a write-down of up to $3.1 billion.
The firm acknowledged the proactive steps taken by Menezes, who has also provided updates on the NEOM and the LA projects, which BMO Capital views positively. The swift actions by the new CEO are seen as a sign of his capability to effectively lead the company. Despite the positive reception of these updates, the size of the write-down was larger than many had anticipated, highlighting the ongoing risks associated with the company’s operations. The company’s stock has shown remarkable resilience, with InvestingPro data showing a 36.4% total return over the past year and historically low price volatility.
BMO Capital’s analyst noted the encouraging signs of Menezes’ leadership, but the financial impact of the write-down suggests a cautious approach is still warranted. The firm’s stance remains unchanged as they await further clarity and developments within the company.
The write-down is a significant financial adjustment for Air Products and reflects the company’s decision to abandon certain projects. The analyst’s comments underscore the balance between the new CEO’s assertive approach and the financial realities of the company’s strategic moves.
Air Products & Chemicals Inc. is a global leader in industrial gases and related equipment, known for its atmospheric, process, and specialty gases, as well as performance materials and chemical intermediates. The company’s decisions and the subsequent market analysis are closely watched by investors and industry observers alike, as they can signal broader trends in the industrial gases sector.
In other recent news, Air Products announced a significant pre-tax charge of up to $3.1 billion for its fiscal second quarter of 2025 due to the cancellation of three major projects in the United States. Despite this charge, the company stated that its adjusted earnings per share for fiscal 2025 would remain unaffected. In terms of analyst perspectives, Jefferies raised its price target for Air Products to $417 while maintaining a Buy rating, expressing optimism about the company’s strategic updates. Conversely, BMO Capital Markets downgraded the stock to Market Perform and reduced the price target to $346, citing concerns about the company’s ability to meet financial targets. Similarly, JPMorgan downgraded the stock to Neutral with a new price target of $320, pointing to risks in earnings growth and currency effects. Air Products recently reported first-quarter earnings per share of $2.86, slightly above analyst estimates, but with revenue falling short at $2.93 billion. The company’s guidance for the second quarter and full fiscal year 2025 also did not meet consensus estimates, contributing to a cautious market outlook. Despite these developments, Air Products remains committed to shareholder returns, continuing its streak of dividend increases for the 43rd consecutive year.
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