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Air Products and Chemicals (APD)
NYSE:APD
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Air Products and Chemicals
(NYSE:APD)67Neutral
Positive Factors
Management
Management's quick action is an encouraging sign that Mr Menezes is well suited for his new role.
Project Progress
The NEOM green hydrogen production asset is now 80% complete and set to come on without indication of incremental cost overruns.
Negative Factors
Financial Performance
APD will exit three projects, resulting in up to a $3.1bn write-down.
Air Products and Chemicals (APD) vs. S&P 500 (SPY)
Market Cap
$67.93B
Dividend Yield2.32%
Average Volume (3M)1.64M
Price to Earnings (P/E)17.7
Beta (1Y)0.83
Revenue Growth-3.12%
EPS Growth64.53%
CountryUS
Employees23,000
SectorBasic Materials
Sector Strength56
IndustryChemicals
Share Statistics
EPS (TTM)17.22
Shares Outstanding222,475,660
10 Day Avg. Volume1,183,780
30 Day Avg. Volume1,640,457
Financial Highlights & Ratios
PEG Ratio0.27
Price to Book (P/B)N/A
Price to Sales (P/S)5.74
Price to Cash Flow (P/CF)21.30
P/FCF Ratio21.30
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$365.62Price Target Upside17.34% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering14
Air Products and Chemicals Business Overview & Revenue Model
Company DescriptionAir Products and Chemicals, Inc. (APD) is a leading global industrial gases company, serving customers in a wide range of industries including energy, transportation, chemicals, food and beverage, and manufacturing. The company provides atmospheric gases, process and specialty gases, equipment, and technologies. With a focus on safety, efficiency, and sustainability, Air Products operates in over 50 countries, offering innovative solutions that enhance productivity, reduce environmental impact, and improve quality of life.
How the Company Makes MoneyAir Products and Chemicals makes money primarily through the production and sale of industrial gases such as oxygen, nitrogen, hydrogen, and argon, which are essential for a variety of industrial processes. The company's revenue streams include the sale of gases directly to customers through its on-site plants, pipeline systems, and merchant gas business. Additionally, Air Products provides equipment and technology solutions, including cryogenic and non-cryogenic gas supply systems, which further contribute to its earnings. The company also engages in significant long-term contracts and partnerships with large industrial players, securing steady revenue through strategic collaborations. Factors such as technological innovation, expansion into emerging markets, and a strong focus on sustainability initiatives are significant contributors to its financial performance.
Air Products and Chemicals Financial Statement Overview
Summary
Air Products and Chemicals exhibits strong profitability with high margins and efficient equity utilization. However, challenges are present in cash flow management, as indicated by negative free cash flow, necessitating strategic financial management.Income Statement
The company demonstrates strong profitability with a gross profit margin of 49.3% and a net profit margin of 31.9% in the TTM period. EBIT and EBITDA margins are robust at 37.0% and 47.1%, respectively. However, there is a slight decline in total revenue from the annual to the TTM period, indicating a need to monitor revenue trends.85
Very Positive
Balance Sheet
The balance sheet reflects a solid equity position with a debt-to-equity ratio of 0.90 and an equity ratio of 41.7%, indicating moderate leverage. Return on equity is strong at 23.0%, suggesting efficient use of equity capital. The company's financial stability is solid, but the relatively high level of debt requires careful management.78
Positive
Cash Flow
Cash flow analysis shows challenges with a negative free cash flow in the TTM period, indicating potential liquidity issues. The operating cash flow to net income ratio is nearly 1.0, reflecting adequate conversion of net income to cash. However, the negative free cash flow suggests a need for improved cash management.65
Positive
| Breakdown | ||
| TTM | Sep 2024 | |
|---|---|---|
| Income Statement | Total Revenue | |
| 11.97B | 12.10B | Gross Profit |
| 3.25B | 3.93B | EBIT |
| 2.33B | 4.47B | EBITDA |
| 3.88B | 6.49B | Net Income Common Stockholders |
| 2.28B | 3.83B | |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |
| 1.96B | 2.98B | Total Assets |
| 40.02B | 39.57B | Total Debt |
| 15.03B | 14.80B | Net Debt |
| 13.18B | 11.82B | Total Liabilities |
| 21.28B | 20.90B | Stockholders Equity |
| 16.69B | 17.04B | |
| Cash Flow | Free Cash Flow | |
| 284.00M | 3.65B | Operating Cash Flow |
| 3.04B | 3.65B | Investing Cash Flow |
| -3.26B | -4.92B | Financing Cash Flow |
| -1.03B | 2.62B |
Air Products and Chemicals Technical Analysis
Positive
311.58
Price Trends
309.90
Positive
313.75
Negative
291.79
Positive
Market Momentum
-1.45
Positive
47.30
Neutral
25.54
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For APD, the sentiment is Positive. The current price of 311.58 is below the 20-day moving average (MA) of 314.42, above the 50-day MA of 309.90, and above the 200-day MA of 291.79, indicating a neutral trend. The MACD of -1.45 indicates Positive momentum. The RSI at 47.30 is Neutral, neither overbought nor oversold. The STOCH value of 25.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for APD.
Air Products and Chemicals Risk Analysis
Air Products and Chemicals disclosed 17 risk factors in its most recent earnings report. Air Products and Chemicals reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Air Products and Chemicals Peers Comparison
Overall Rating
UnderperformOutperform
Sector (47)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $218.18B | 33.87 | 16.87% | 1.21% | 0.46% | 7.97% | |
73 Outperform | $10.72B | 12.13 | 16.11% | 3.50% | 1.91% | 2.94% | |
70 Outperform | $32.48B | 46.48 | 3.12% | 1.96% | 2.64% | 80.37% | |
67 Neutral | $67.93B | 17.73 | 22.98% | 2.32% | -3.12% | 64.53% | |
63 Neutral | $1.18B | 77.40 | 5.11% | 1.16% | 22.63% | ― | |
58 Neutral | $25.07B | 22.75 | 6.14% | 7.86% | -3.72% | 91.57% | |
47 Neutral | $2.64B | -4.00 | -31.55% | 3.33% | 2.93% | -29.90% |
* Basic Materials Sector Average
Performance Comparison
APD
Air Products and Chemicals
311.58
74.78
31.58%
PX
P10 Holdings
12.08
4.39
57.09%
EMN
Eastman Chemical
97.73
13.49
16.01%
DD
DuPont de Nemours
79.48
10.51
15.24%
LIN
Linde
468.25
10.23
2.23%
DOW
Dow Inc
37.78
-15.79
-29.48%
Air Products and Chemicals Earnings Call Summary
Earnings Call Date: Feb 6, 2025 | % Change Since: -6.47% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflected a mixed performance with strong earnings per share exceeding expectations and improved margins. However, challenges were noted in several areas including volume declines due to divestments, market challenges in helium, and regional weaknesses in Europe, the Middle-East, and India.Highlights
Exceeded Earnings Guidance
First-quarter adjusted earnings per share of $2.86 exceeded the upper-end of the guidance range of $2.75 to $2.85, up 1% over last year, driven by results in the Americas.
Improved Margins
Adjusted EBITDA margin was up 140 basis points and adjusted operating margin increased 80 basis points versus the prior year.
Strong Performance in Americas
Americas overall pricing was 2% higher, with a 3% volume improvement mainly due to a significant non-recurring sale of helium.
Asia Segment Growth
Asia segment saw a 2% volume improvement driven by contributions from new assets, with adjusted EBITDA increasing 7%.
Lowlights
Volume Decline Due to LNG Divestment
Overall volume was down 2%, primarily due to the divestment of the LNG business.
Challenges in Europe
Volume in Europe was down 5% due to lower onsite and continued weakness in merchant demand, primarily helium.
Middle-East and India Segment Weakness
Lower merchant volume and unfavorable equity affiliate income and costs negatively impacted the Middle-East and India segment.
Helium Market Challenges
The helium market is currently long, with increased supply from Russian assets impacting Asia and making the market challenging.
Planned Maintenance Affecting Uzbekistan
The Uzbekistan project is undergoing planned facility upgrades which will affect performance in the first half of fiscal 2025.
Company Guidance
During the Air Products First Quarter Earnings Release Conference Call for Fiscal Year 2025, several key metrics and forward-looking statements were discussed. Adjusted earnings per share (EPS) for the first quarter reached $2.86, surpassing the guidance range of $2.75 to $2.85 despite the divestment of the LNG process technology and equipment business, which had contributed $0.08 to the previous year's first-quarter earnings. The adjusted EBITDA margin improved by 140 basis points and the adjusted operating margin increased by 80 basis points. For the second quarter, Air Products anticipates an adjusted EPS range of $2.75 to $2.85, reflecting a 1% to 4% increase, while maintaining their full-year guidance amid challenges such as the strengthening U.S. dollar, tariffs, and global helium market dynamics. Additionally, the call highlighted the 5% decrease in overall volume due to the LNG business divestment, with Americas showing volume improvement but offset by European weaknesses. The company also discussed the impact of a significant non-recurring helium sale and projected improvements in the second half due to pricing actions, productivity initiatives, and the return to full operation of the Uzbekistan facility.Air Products and Chemicals Corporate Events
Business Operations and Strategy
Air Products Exits Key U.S. Projects Amid Strategic Review
Negative
Feb 24, 2025
On February 24, 2025, Air Products and Chemicals, Inc. announced its decision to exit three U.S.-based projects as part of a strategic review by its new Board of Directors and CEO. This move will result in a pre-tax charge of up to $3.1 billion in fiscal 2025’s second quarter, primarily for asset write-downs and contract terminations. The projects include a sustainable aviation fuel expansion in California, a green liquid hydrogen facility in New York, and a carbon monoxide production project in Texas. The company cited challenging commercial aspects, regulatory developments, and unfavorable project economics as reasons for these cancellations. Air Products will continue to evaluate its project backlog but does not anticipate further material cancellations.
Executive/Board Changes
Air Products Names New CEO Eduardo Menezes
Positive
Feb 4, 2025
On February 4, 2025, Air Products and Chemicals, Inc. announced the appointment of Eduardo F. Menezes as the new Chief Executive Officer, effective February 7, 2025, succeeding Seifi Ghasemi after more than a decade of service. Menezes, who has extensive experience in the industrial gases sector, will also join the board of directors along with Wayne T. Smith as Chairman and Dennis H. Reilley as Vice Chairman. This leadership transition is expected to leverage Menezes’ global expertise to enhance the company’s value and drive future growth.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.