Investing.com -- Analysts at JP Morgan and BMO Capital Markets downgraded Air Products and Chemicals Inc (NYSE:APD) on concerns over earnings growth, currency headwinds, and management transition.
JP Morgan lowered its rating on Air Products to "Neutral" from "Overweight," pointing to risks from flattening industrial gas prices and the company’s valuation relative to rival Linde (NYSE:LIN). The bank noted that while new leadership, including CEO Eduardo Menezes, brings strong industry experience, the transition period could present challenges.
"We do not think that it is easy for APD to trade at Linde multiples sustainably," JP Morgan wrote, adding that Air Products’ return on assets lags behind Linde by roughly 10 percentage points.
BMO Capital Markets also downgraded APD to "Market Perform" and cut its price target to $346, citing first-quarter weakness and a modest second-quarter outlook. Analysts expressed concerns over the company’s ability to meet fiscal 2025 guidance, suggesting that shares could decline further before stabilizing.
“It unlikely APD will successfully bridge to the FY25 guide,” BMO analyst said.
Air Products’ management shift follows the departure of former CEO Seifi Ghasemi on February 7.