We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Air Products' (APD) Stock Up 18% in 6 Months: Here's Why
Read MoreHide Full Article
Shares of industrial gases giant, Air Products and Chemicals, Inc. (APD - Free Report) have gained around 18% over the last six months. The company has also outperformed its industry’s gain of roughly 16% over the same time frame.
Air Products has a market cap of roughly $37.2 billion and average volume of shares traded in the last three months is around 896.4K. The company has a long-term (three-five years) expected earnings per share (EPS) growth rate of roughly 14.1%, higher than the industry average of 10.2%.
Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.
What’s Driving APD?
Upbeat outlook and strong growth prospects have contributed to the gains in Air Products’ shares. Air Products expects adjusted earnings per share of $1.60-$1.70 for first-quarter fiscal 2018, up 9-16% from the year-ago quarter. For fiscal 2018, Air Products sees adjusted earnings per share of $6.85-$7.05, up 9-12% year over year.
Air Products has built a strong project backlog. These projects are anticipated to be accretive to earnings and cash flow over the next few years. Moreover, strategic investments in high-return projects, new business deals and acquisitions are expected to drive results in fiscal 2018.
Air Products, in July, inked a long-term gas supply agreement with Huntsman Corporation (HUN - Free Report) . Under the deal, Air Products will build, own and operate a new steam methane reformer and cold box in Geismar, LA. Air Products facilities which will supply hydrogen, carbon monoxide and steam to Huntsman's Geismar operations are expected to be onstream in Jan 2020. The new state-of-the-art facility will provide high reliability and sustainability with enhanced energy efficiency and will help to lower emissions.
The company is also expanding its footprint in China. Air Products has landed a second long-term oxygen and nitrogen supply contract with a leading global materials supplier in Guangdong in South China. The move will help to strengthen its position in the strategic industrial base as well as relationship with this global customer. Air Products and Yankuang Group also entered into an agreement for a $3.5 billion coal-to-syngas production facility to be constructed in Yulin City, Shaanxi Province, China.
Air Products also remains on track in delivering on cost-reduction programs, which is likely to support margins. The company is making a good progress with its $600 million cost-cutting program and has already delivered more than $475 million of cost savings. Additionally, it plans to deliver the balance in next two-three years.
Moreover, Air Products has significant amount of cash to invest in core industrial gases business. The company expects to have at least $8 billion to deploy in strategic, high-return opportunities (including acquisitions and large industrial gases projects) to create shareholders value over the next three years.
Air Products and Chemicals, Inc. Price and Consensus
Kronos has an expected long-term earnings growth of 5%. Its shares are up roughly 114% over a year.
Koppers has an expected long-term earnings growth of 18%. The stock has gained around 21% over a year.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Image: Bigstock
Air Products' (APD) Stock Up 18% in 6 Months: Here's Why
Shares of industrial gases giant, Air Products and Chemicals, Inc. (APD - Free Report) have gained around 18% over the last six months. The company has also outperformed its industry’s gain of roughly 16% over the same time frame.
Air Products has a market cap of roughly $37.2 billion and average volume of shares traded in the last three months is around 896.4K. The company has a long-term (three-five years) expected earnings per share (EPS) growth rate of roughly 14.1%, higher than the industry average of 10.2%.
Let’s take a look into the factors that are driving this Zacks Rank #2 (Buy) stock.
What’s Driving APD?
Upbeat outlook and strong growth prospects have contributed to the gains in Air Products’ shares. Air Products expects adjusted earnings per share of $1.60-$1.70 for first-quarter fiscal 2018, up 9-16% from the year-ago quarter. For fiscal 2018, Air Products sees adjusted earnings per share of $6.85-$7.05, up 9-12% year over year.
Air Products has built a strong project backlog. These projects are anticipated to be accretive to earnings and cash flow over the next few years. Moreover, strategic investments in high-return projects, new business deals and acquisitions are expected to drive results in fiscal 2018.
Air Products, in July, inked a long-term gas supply agreement with Huntsman Corporation (HUN - Free Report) . Under the deal, Air Products will build, own and operate a new steam methane reformer and cold box in Geismar, LA. Air Products facilities which will supply hydrogen, carbon monoxide and steam to Huntsman's Geismar operations are expected to be onstream in Jan 2020. The new state-of-the-art facility will provide high reliability and sustainability with enhanced energy efficiency and will help to lower emissions.
The company is also expanding its footprint in China. Air Products has landed a second long-term oxygen and nitrogen supply contract with a leading global materials supplier in Guangdong in South China. The move will help to strengthen its position in the strategic industrial base as well as relationship with this global customer. Air Products and Yankuang Group also entered into an agreement for a $3.5 billion coal-to-syngas production facility to be constructed in Yulin City, Shaanxi Province, China.
Air Products also remains on track in delivering on cost-reduction programs, which is likely to support margins. The company is making a good progress with its $600 million cost-cutting program and has already delivered more than $475 million of cost savings. Additionally, it plans to deliver the balance in next two-three years.
Moreover, Air Products has significant amount of cash to invest in core industrial gases business. The company expects to have at least $8 billion to deploy in strategic, high-return opportunities (including acquisitions and large industrial gases projects) to create shareholders value over the next three years.
Air Products and Chemicals, Inc. Price and Consensus
Air Products and Chemicals, Inc. Price and Consensus | Air Products and Chemicals, Inc. Quote
Other Stocks to Consider
Other top-ranked companies in the basic materials space include Kronos Worldwide, Inc. (KRO - Free Report) and Koppers Holdings Inc. (KOP - Free Report) , both sporting a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Kronos has an expected long-term earnings growth of 5%. Its shares are up roughly 114% over a year.
Koppers has an expected long-term earnings growth of 18%. The stock has gained around 21% over a year.
Zacks Editor-in-Chief Goes "All In" on This Stock
Full disclosure, Kevin Matras now has more of his own money in one particular stock than in any other. He believes in its short-term profit potential and also in its prospects to more than double by 2019. Today he reveals and explains his surprising move in a new Special Report.
Download it free >>