On Monday, TD Cowen analyst Marc Bianchi upgraded Linde stock (NASDAQ:NYSE:LIN) from Hold to Buy, setting a new price target of $515, up from the previous $480. The adjustment reflects a positive outlook despite a reduction in EBITDA estimates for 2025-2030 by 2-6%.
Bianchi attributes the new target to the time value and updated market rates, which, coupled with Linde's recent stock price decline, present a compelling case for the upgrade. According to InvestingPro data, Linde's stock has historically demonstrated low price volatility, with a beta of 0.95, making it an attractive option for stability-focused investors.
Bianchi noted that although Linde has been rated a Hold since the firm's initial coverage, the company's high-quality business operations and management have always been recognized. The current upgrade to Buy is driven by the now favorable risk-reward balance due to the stock's recent performance. With an EBITDA of $12.54 billion in the last twelve months and a strong financial health score rated as "GOOD" by InvestingPro, Linde's fundamental strength supports this positive outlook.
The analyst also acknowledged the potential challenges posed by broader economic growth concerns. However, he expressed confidence in Linde's ability to outperform in various macroeconomic scenarios.
Bianchi pointed out that industrial gas companies often fare well during inflationary periods and anticipates that Linde will experience similar or greater benefits compared to its peers. This resilience is reflected in Linde's impressive 33-year streak of consecutive dividend increases, as highlighted in InvestingPro's analysis, which offers 12 additional key insights about the company's performance and outlook.
Linde, a leading industrial gas company, has been on TD Cowen's radar for its exceptional business quality and management. Despite the downgrade in EBITDA forecasts, the firm's analysts believe Linde is positioned to excel even in uncertain economic conditions.
The upgrade from TD Cowen comes at a time when investors are gauging the impact of economic indicators on various sectors. Linde's new price target and Buy rating reflect the analysts' confidence in the company's resilience and potential for growth amidst market fluctuations.
In other recent news, Linde PLC, a global leader in the industrial gases sector, reported a 2% increase in sales to $8.4 billion in their latest earnings call, mainly driven by project activity and demand for liquefied natural gas infrastructure. The company also secured a significant $2 billion contract with Dow Chemical (NYSE:DOW), pushing its project backlog to a record high of $10 billion. For Q4 2024, Linde anticipates an earnings per share (EPS) of $3.86 to $3.96 and forecasts a full-year EPS of $15.40 to $15.50, indicating a 9-10% growth.
In analyst interactions, BMO Capital Markets raised its price target for Linde to $507, maintaining an Outperform rating, while Mizuho (NYSE:MFG) analysts expressed confidence in Linde's market position and business strategy.
In executive transitions, John Panikar, Executive Vice President-APAC, is set to retire in 2025, with Binod Patwari stepping in as Senior Vice President-APAC from November 2024. These developments are part of Linde's recent activities in the industrial gases market.
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