Strategic Buy Rating for Air Products and Chemicals Amidst Project Write-Downs and Clean Hydrogen Focus

Analyst John Roberts CFA from Mizuho Securities maintained a Buy rating on Air Products and Chemicals (APD – Research Report) and keeping the price target at $385.00.

John Roberts CFA has given his Buy rating due to a combination of factors influencing Air Products and Chemicals’ strategic direction. The company’s new CEO has announced significant project write-downs amounting to $3 billion, which, while substantial, do not impact the adjusted EPS targets. This move is expected to reduce future capital expenditures, particularly on projects that were not yet completed.
Despite these write-downs, Air Products and Chemicals continues to focus on its major clean hydrogen projects in Alberta, NEOM, and Louisiana. These projects are strategically positioned to leverage inexpensive North American natural gas and benefit from credits that offset carbon capture and sequestration operating expenses. Additionally, the company is actively seeking partnerships and financing options to enhance its project execution, particularly in Louisiana. The ongoing demand for clean hydrogen, as evidenced by recent competitor contracts, further supports the potential growth and profitability of these initiatives.

In another report released today, Barclays also maintained a Buy rating on the stock with a $365.00 price target.