Nvidia, AMD to pay 15% of China chip sales revenue to US govt- FT
On Friday, JPMorgan analysts downgraded Air Products & Chemicals Inc. (NYSE:APD) stock from ’Overweight’ to ’Neutral’ and lowered the price target to $320 from the previous $345. The downgrade is attributed to potential risks in the company’s earnings growth due to a stabilization of industrial gas prices and adverse currency effects.
The analysts noted that Air Products, with its current market capitalization of $73 billion and P/E ratio of 19.28x, trades at a slight discount compared to its peer Linde (NYSE:LIN), without any unusual valuation gap. They pointed out that the discount is within the typical range of 1.0-1.5 multiple points. Despite recognizing the strength of the new management team, with Dennis Reilley and Eduardo Menezes bringing experience from Praxair (NYSE:) and Linde, the analysts expressed caution, suggesting that the new leadership may need time to address the unique challenges of Air Products’ larger projects.
The departure of former CEO Seifi Ghasemi on February 7 was highlighted as a significant change, particularly as he was a driving force behind major projects in NEOM and Louisiana. The JPMorgan team expressed skepticism about Air Products’ ability to sustain trading at multiples comparable to Linde, except possibly due to short-term momentum.
In their analysis, JPMorgan also compared the return on assets between Air Products and Linde, noting a roughly 10 percentage point difference in favor of Linde, with Air Products’ ROA currently at 10.5%. However, they do not anticipate major layoffs under the new management, as sales per employee at Air Products are higher than at Linde. The analysts concluded by mentioning Linde’s greater leverage to a growing economy due to its larger packaged gas business, implying a more robust outlook for Linde in comparison to Air Products. Despite these challenges, InvestingPro data shows Air Products has maintained dividend payments for 55 consecutive years, demonstrating long-term financial stability. For deeper insights into APD’s financial health and growth prospects, investors can access the comprehensive Pro Research Report, available exclusively on InvestingPro.
In other recent news, Air Products reported first-quarter earnings per share (EPS) of $2.86, slightly above analyst estimates, but revenues fell short at $2.93 billion. The company forecasts a lower-than-expected EPS range of $2.75 to $2.85 for the second quarter of fiscal 2025. In governance developments, Air Products amended its corporate bylaws and appointed Wayne T. Smith as Chairman and Dennis H. Reilley as Vice Chairman of the Board.
In analyst actions, UBS raised the price target for Air Products to $385, maintaining a Buy rating, while Barclays (LON:BARC) upgraded the stock to Overweight and increased the price target to $365. Both firms cited recent board changes and potential operational improvements as positive catalysts.
In the company’s 2025 Annual Meeting of Shareholders, nine directors were elected to the board, including three nominees from investment firm Mantle Ridge LP. The compensation of the company’s executive officers was approved and Deloitte & Touche LLP was ratified as the independent registered public accounting firm for the fiscal year ending September 30, 2025. These are among the recent developments affecting Air Products.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.