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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 benefiting from investments in high-return projects, new business deals, acquisitions and productivity initiatives. Higher volumes and pricing are also likely to support its results amid currency headwinds.
The company’s shares have gained 20.9% over a year, compared with a 12.7% rise of its industry.
Image Source: Zacks Investment Research
Air Products, a Zacks Rank #3 (Hold) stock, is gaining from its investments in high-return industrial gas projects and productivity measures. It remains committed to 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 2018-2027) $31.8 billion in high-return investments aimed at creating significant shareholder value. APD expects its $1 billion acquisition of the natural gas-to-syngas facility in Uzbekistan and the new LNG sale of equipment projects to boost its future earnings.
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. It is also expected to benefit from higher pricing and volumes.
The company, in its fiscal third quarter call, said that it expects full-year fiscal 2023 adjusted earnings per share (EPS) of $11.40-$11.50, indicating 11-12% growth from the prior year’s adjusted EPS. For the fourth quarter of fiscal 2023, the company expects adjusted EPS in the range of $3.04-$3.14, suggesting a rise of 7-10% from fourth-quarter fiscal 2022 adjusted EPS.
Air Products also remains committed to maximize returns to shareholders leveraging strong balance sheet and cash flows. APD, earlier this year, increased its quarterly dividend by 8% to $1.75 per share from $1.62 per share. This marked the 41st straight year of dividend increase. The company expects to pay more than $1.5 billion in dividends to shareholders in 2023.
However, the slowdown in China and Europe may also affect the company’s business in these regions. The cooling China economy might impact volumes in the Industrial Gases - Asia segment. The lack of growth in industrial output in Europe is another concern.
The company also faces headwinds from unfavorable currency translation. APD saw currency headwinds in its Asia segment in the last reported quarter due to the weakening of Asian currencies vis-à-vis the U.S. dollar, which reduced its sales and EBITDA for the unit by 5% in the quarter. It is likely to face continued currency headwinds in the fiscal fourth quarter.
Air Products and Chemicals, Inc. Price and Consensus
Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Hawkins, Inc. (HWKN - Free Report) and PPG Industries, Inc. (PPG - Free Report) .
The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.48, implying year-over-year growth of 205.3%. Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a trailing four-quarter earnings surprise of roughly 10%, on average. The stock has rallied around 97% in a year.
Hawkins currently carrying a Zacks Rank #1. It has a projected earnings growth rate of 18.9% for the current year.
Hawkins has a trailing four-quarter earnings surprise of roughly 25.6%, on average. HWKN shares are up around 66% in a year.
PPG Industries currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for PPG's current-year earnings has been revised 3.6% upward over the past 60 days.
PPG Industries’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 7.3%, on average. PPG shares have gained around 15% in a year.
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Air Products (APD) Gains on High-return Projects & Productivity
Air Products and Chemicals, Inc. (APD - Free Report) is benefiting from investments in high-return projects, new business deals, acquisitions and productivity initiatives. Higher volumes and pricing are also likely to support its results amid currency headwinds.
The company’s shares have gained 20.9% over a year, compared with a 12.7% rise of its industry.
Image Source: Zacks Investment Research
Air Products, a Zacks Rank #3 (Hold) stock, is gaining from its investments in high-return industrial gas projects and productivity measures. It remains committed to 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 2018-2027) $31.8 billion in high-return investments aimed at creating significant shareholder value. APD expects its $1 billion acquisition of the natural gas-to-syngas facility in Uzbekistan and the new LNG sale of equipment projects to boost its future earnings.
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. It is also expected to benefit from higher pricing and volumes.
The company, in its fiscal third quarter call, said that it expects full-year fiscal 2023 adjusted earnings per share (EPS) of $11.40-$11.50, indicating 11-12% growth from the prior year’s adjusted EPS. For the fourth quarter of fiscal 2023, the company expects adjusted EPS in the range of $3.04-$3.14, suggesting a rise of 7-10% from fourth-quarter fiscal 2022 adjusted EPS.
Air Products also remains committed to maximize returns to shareholders leveraging strong balance sheet and cash flows. APD, earlier this year, increased its quarterly dividend by 8% to $1.75 per share from $1.62 per share. This marked the 41st straight year of dividend increase. The company expects to pay more than $1.5 billion in dividends to shareholders in 2023.
However, the slowdown in China and Europe may also affect the company’s business in these regions. The cooling China economy might impact volumes in the Industrial Gases - Asia segment. The lack of growth in industrial output in Europe is another concern.
The company also faces headwinds from unfavorable currency translation. APD saw currency headwinds in its Asia segment in the last reported quarter due to the weakening of Asian currencies vis-à-vis the U.S. dollar, which reduced its sales and EBITDA for the unit by 5% in the quarter. It is likely to face continued currency headwinds in the fiscal fourth quarter.
Air Products and Chemicals, Inc. Price and Consensus
Air Products and Chemicals, Inc. price-consensus-chart | Air Products and Chemicals, Inc. Quote
Stocks to Consider
Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Hawkins, Inc. (HWKN - Free Report) and PPG Industries, Inc. (PPG - Free Report) .
The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.48, implying year-over-year growth of 205.3%. Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a trailing four-quarter earnings surprise of roughly 10%, on average. The stock has rallied around 97% in a year.
Hawkins currently carrying a Zacks Rank #1. It has a projected earnings growth rate of 18.9% for the current year.
Hawkins has a trailing four-quarter earnings surprise of roughly 25.6%, on average. HWKN shares are up around 66% in a year.
PPG Industries currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for PPG's current-year earnings has been revised 3.6% upward over the past 60 days.
PPG Industries’ earnings beat the Zacks Consensus Estimate in three of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 7.3%, on average. PPG shares have gained around 15% in a year.