Allentown, Pennsylvania-based Air Products and Chemicals, Inc. (APD) provides atmospheric gases, process and specialty gases, equipment, and related services. Valued at $71.2 billion by market cap, the company develops, engineers, builds, owns, and operates some of the world's largest industrial gas projects, including gasification projects for producing high-value power, fuels, and chemicals.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and APD perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the specialty chemicals industry. APD operates in over 50 countries, allowing it to tap into diverse markets and offer a wide range of products like industrial gases and performance materials. The company's strong focus on research and development has led to technological advancements in areas like cryogenics and hydrogen fuel cells, giving it a competitive edge in the market.
Despite its notable strength, APD slipped 6% from its 52-week high of $337, achieved on Dec. 3. Over the past three months, APD stock gained 15.6%, outperforming the Materials Select Sector SPDR Fund’s (XLB)1.3% gains during the same time frame.
In the longer term, shares of APD rose 15.6% on a YTD basis and climbed 20.3% over the past 52 weeks, outperforming XLB’s YTD gains of 7.4% and 12.2% returns over the last year.
To confirm the bullish trend, APD has traded above its 200-day moving average since late May, with some fluctuations. However, it has traded below its 50-day moving average recently.
APD's strong performance can be credited to their strategic decision to sell off their LNG business, showcasing their dedication to the industrial gas sector. Additionally, their focus on providing clean hydrogen for heavy transportation and industrial use has positioned them well to meet growing demand.
On Nov. 7, APD shares closed up around 2% after reporting its Q4 results. Its adjusted EPS increased 13% year over year to $3.56. The company’s revenue stood at $3.2 billion, down marginally year over year.
APD’s rival, Linde plc (LIN) shares lagged behind the stock, with a 7.8% gain on a YTD basis and 10.3% returns over the past 52 weeks.
Wall Street analysts are moderately bullish on APD’s prospects. The stock has a consensus “Moderate Buy” rating from the 21 analysts covering it, and the mean price target of $343.55 suggests a potential upside of 8.5% from current price levels.
