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Air Products (APD) Gains on High-Return Projects & Productivity
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Air Products and Chemicals, Inc. (APD - Free Report) is poised to benefit from its project investments, productivity actions and new business deals. However, the sluggishness in Europe and China is a concern.
The company’s shares are down 1.4% over a year, compared with a 3.3% decline of its industry.
Image Source: Zacks Investment Research
Air Products is expected to gain from its investments in high-return industrial gas projects and productivity measures. It remains focused on its gasification strategy and is executing its growth projects. These projects are expected to be accretive to earnings and cash flows.
APD is realizing the benefits of the completion of the second phase of the Jazan project in Saudi Arabia. The company has a total available capacity to deploy (over fiscal 2024-2033) $30.8 billion in high-return investments aimed at creating significant shareholder value.
Air Products is also driving productivity to improve its cost structure. It is seeing the positive impacts of its productivity actions. Benefits from additional productivity and cost improvement programs are likely to support its margins moving ahead. The company also remains focused on improving pricing amid an inflationary environment.
The company also remains committed to maximize returns to shareholders leveraging strong balance sheet and cash flows. Air Products’ board, in January 2024, increased its quarterly dividend to $1.77 per share. This marked the 42nd straight year of dividend increase. The company paid roughly $1.5 billion in dividends to shareholders in 2023. It expects to return roughly $1.6 billion to shareholders through dividends in 2024.
However, the slowdown in China and Europe may affect APD’s business in these regions. The sluggish China economy is impacting volumes in the Industrial Gases - Asia segment. A slower economic recovery in China and the softness in electronics may continue to affect the segment’s volumes. Air Products is also seeing weak demand for merchant products in Europe. Its volumes in the Europe division fell 6% year over year in the fiscal second quarter partly reflecting weaker merchant volumes. The lack of growth in industrial output in Europe is a concern for the near term.
Air Products and Chemicals, Inc. Price and Consensus
Better-ranked stocks in the basic materials space include Axalta Coating Systems Ltd. (AXTA - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and ATI Inc. (ATI - Free Report) .
Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 15.1%. The company’s shares have soared roughly 99% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axalta Coating Systems, carrying a Zacks Rank #1, has a projected earnings growth rate of 26.8% for the current year. In the past 60 days, the consensus estimate for AXTA's current-year earnings has been revised upward by 5.9%. The company’s shares have gained roughly 12% in the past year.
ATI currently carries a Zacks Rank #1. ATI beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 8.3%. The company’s shares have rallied around 43% in the past year.
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Air Products (APD) Gains on High-Return Projects & Productivity
Air Products and Chemicals, Inc. (APD - Free Report) is poised to benefit from its project investments, productivity actions and new business deals. However, the sluggishness in Europe and China is a concern.
The company’s shares are down 1.4% over a year, compared with a 3.3% decline of its industry.
Image Source: Zacks Investment Research
Air Products is expected to gain from its investments in high-return industrial gas projects and productivity measures. It remains focused on its gasification strategy and is executing its growth projects. These projects are expected to be accretive to earnings and cash flows.
APD is realizing the benefits of the completion of the second phase of the Jazan project in Saudi Arabia. The company has a total available capacity to deploy (over fiscal 2024-2033) $30.8 billion in high-return investments aimed at creating significant shareholder value.
Air Products is also driving productivity to improve its cost structure. It is seeing the positive impacts of its productivity actions. Benefits from additional productivity and cost improvement programs are likely to support its margins moving ahead. The company also remains focused on improving pricing amid an inflationary environment.
The company also remains committed to maximize returns to shareholders leveraging strong balance sheet and cash flows. Air Products’ board, in January 2024, increased its quarterly dividend to $1.77 per share. This marked the 42nd straight year of dividend increase. The company paid roughly $1.5 billion in dividends to shareholders in 2023. It expects to return roughly $1.6 billion to shareholders through dividends in 2024.
However, the slowdown in China and Europe may affect APD’s business in these regions. The sluggish China economy is impacting volumes in the Industrial Gases - Asia segment. A slower economic recovery in China and the softness in electronics may continue to affect the segment’s volumes. Air Products is also seeing weak demand for merchant products in Europe. Its volumes in the Europe division fell 6% year over year in the fiscal second quarter partly reflecting weaker merchant volumes. The lack of growth in industrial output in Europe is a concern for the near term.
Air Products and Chemicals, Inc. Price and Consensus
Air Products and Chemicals, Inc. price-consensus-chart | Air Products and Chemicals, Inc. Quote
Zacks Rank & Key Picks
APD currently has a Zacks Rank #3 (Hold).
Better-ranked stocks in the basic materials space include Axalta Coating Systems Ltd. (AXTA - Free Report) , Carpenter Technology Corporation (CRS - Free Report) and ATI Inc. (ATI - Free Report) .
Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). CRS beat the Zacks Consensus Estimate in three of the last four quarters while matching it once, with the average earnings surprise being 15.1%. The company’s shares have soared roughly 99% in the past year. You can see the complete list of today’s Zacks #1 Rank stocks here.
Axalta Coating Systems, carrying a Zacks Rank #1, has a projected earnings growth rate of 26.8% for the current year. In the past 60 days, the consensus estimate for AXTA's current-year earnings has been revised upward by 5.9%. The company’s shares have gained roughly 12% in the past year.
ATI currently carries a Zacks Rank #1. ATI beat the Zacks Consensus Estimate in each of the last four quarters, with the average earnings surprise being 8.3%. The company’s shares have rallied around 43% in the past year.