Air Products And Chemicals (APD), What Is Behind The Fresh Attention?

Air Products and Chemicals (APD) just signed a definitive deal to design, build, and run an LNG based air separation unit at Malaysia’s Pengerang LNG regasification terminal, supplying key industrial hubs.

Set against that Malaysian expansion, Air Products and Chemicals’ shares have picked up momentum recently, with a 7 day share price return of 6.52% and a 30 day gain of 5.42%. This has contributed to a 19.61% year to date share price return and a 21.47% total shareholder return over the past year.

Scan how Air Products and Chemicals compares with other industrial gas and infrastructure plays by checking the hand picked 41 power grid technology and infrastructure stocks in the same energy transition theme.

Air Products and Chemicals has a long list of projects and a share price that has just moved sharply higher. The question now is whether that business strength is already fully reflected in today’s valuation.

Most Popular Narrative: 13% Undervalued

On the numbers, Air Products and Chemicals is framed as worth $345 per share versus a last close of $299.59, which puts the LNG move in Malaysia inside a broader story about disciplined growth and cash generation.

Capital discipline and portfolio optimization, including the decision not to proceed with the Louisiana Clean Energy Complex and several other clean energy projects and the related plan to lower annual capex toward about US$2.0b to US$2.5b with roughly US$1.5b focused on traditional industrial gas projects, may free cash for higher return uses and support future return on capital and free cash flow.

See why 74 investors see Air Products and Chemicals as 13% undervalued.

Result: Fair Value of $345.11 (UNDERVALUED)

Still, the story around Air Products and Chemicals can change quickly if large hydrogen or ammonia projects run over budget, or if key helium contracts fall short of expectations.

Find out about the key risks to this Air Products and Chemicals narrative.

Another View: Air Products and Chemicals Looks Expensive On Sales

The SWS DCF model frames Air Products and Chemicals as undervalued, yet its P/S ratio of 5.3x is far richer than the US Chemicals sector at 1.1x, the peer average at 4.1x, and even the fair ratio of 2.3x. That gap points to valuation risk if sentiment cools.

To see what the numbers say about this price, check the detailed valuation breakdown in See what the numbers say about this price — find out in our valuation breakdown..

Next Steps

Mixed messages on Air Products and Chemicals so far. With both concerns and bright spots in play, move quickly and weigh the 2 key rewards and 2 important warning signs.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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