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Air Products (APD) Scales Fresh 52-Week High at $155.94
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Shares of Air Products (APD - Free Report) touched a new 52-week high of $155.94 last Friday, before pulling back a bit to close the day at $155.68. The industrial gases giant has delivered a year-to-date return of roughly 21%. Average volume of shares traded over the last three months is around 948.3K.
Factors to Consider
Air Products saw higher profits on a reported basis in third-quarter fiscal 2016 (ended Jun 30, 2016), aided by its cost management initiatives and operational improvements. Adjusted earnings beat the Zacks Consensus Estimate while sales missed. The company raised the lower end of its fiscal 2016 earnings guidance to the band of $7.45–$7.55 per share from the earlier view of $7.40–$7.55.
Air Products is gaining from a diverse customer base, cost-reduction measures and sustained pricing power. Acquisitions, new business deals and strategic investments are expected to support its results in fiscal 2016. The company also has a strong project backlog. These projects are expected to be accretive to earnings and cash flow as they come on stream over the next few years.
Moreover, the acquisition of a majority stake in the Chilean industrial gas company – Indura S.A. – has ushered in substantial growth opportunity for Air Product, placing it as Latin America’s second largest industrial gas producer.
Air Products is also keeping a tight control on expenses and undertaking work process improvement initiatives. The company remains on track in delivering on its cost reduction programs, which should support its margins.
Air Products, in May 2016, agreed to divest the Performance Materials Division (“PMD”) of its Materials Technologies segment to Germany's Evonik Industries AG. The company is also on track to spin-off the Electronic Materials Division (“EMD”) of the Materials Technologies unit to shareholders as a separate public company, dubbed Versum Materials.
The planned sale of PMD and spin-off of EMD, both non-core businesses, will allow Air Products to direct resources to grow its core and stable industrial gases business. These actions (part of the company’s strategic five-point plan) are expected to enable Air Products to achieve its goal of becoming the safest and most profitable industrial gas company globally and create shareholder value in the longer term.
However, Air Products' industrial gases business in the Europe, Middle East, and Africa (“EMEA”) region is seeing pressure from a weak operating environment. The company is also exposed to currency headwinds. Moreover, it still has a debt-laden balance sheet.
Air Products currently carries a Zacks Rank #3 (Hold).
Better-ranked companies in the diversified chemical space include Innospec Inc. (IOSP - Free Report) , Innophos Holdings Inc and The Chemours Company (CC - Free Report) , all sporting a Zacks Rank #1 (Strong Buy).
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Air Products (APD) Scales Fresh 52-Week High at $155.94
Shares of Air Products (APD - Free Report) touched a new 52-week high of $155.94 last Friday, before pulling back a bit to close the day at $155.68. The industrial gases giant has delivered a year-to-date return of roughly 21%. Average volume of shares traded over the last three months is around 948.3K.
Factors to Consider
Air Products saw higher profits on a reported basis in third-quarter fiscal 2016 (ended Jun 30, 2016), aided by its cost management initiatives and operational improvements. Adjusted earnings beat the Zacks Consensus Estimate while sales missed. The company raised the lower end of its fiscal 2016 earnings guidance to the band of $7.45–$7.55 per share from the earlier view of $7.40–$7.55.
Air Products is gaining from a diverse customer base, cost-reduction measures and sustained pricing power. Acquisitions, new business deals and strategic investments are expected to support its results in fiscal 2016. The company also has a strong project backlog. These projects are expected to be accretive to earnings and cash flow as they come on stream over the next few years.
Moreover, the acquisition of a majority stake in the Chilean industrial gas company – Indura S.A. – has ushered in substantial growth opportunity for Air Product, placing it as Latin America’s second largest industrial gas producer.
Air Products is also keeping a tight control on expenses and undertaking work process improvement initiatives. The company remains on track in delivering on its cost reduction programs, which should support its margins.
Air Products, in May 2016, agreed to divest the Performance Materials Division (“PMD”) of its Materials Technologies segment to Germany's Evonik Industries AG. The company is also on track to spin-off the Electronic Materials Division (“EMD”) of the Materials Technologies unit to shareholders as a separate public company, dubbed Versum Materials.
The planned sale of PMD and spin-off of EMD, both non-core businesses, will allow Air Products to direct resources to grow its core and stable industrial gases business. These actions (part of the company’s strategic five-point plan) are expected to enable Air Products to achieve its goal of becoming the safest and most profitable industrial gas company globally and create shareholder value in the longer term.
However, Air Products' industrial gases business in the Europe, Middle East, and Africa (“EMEA”) region is seeing pressure from a weak operating environment. The company is also exposed to currency headwinds. Moreover, it still has a debt-laden balance sheet.
Air Products currently carries a Zacks Rank #3 (Hold).
AIR PRODS & CHE Price
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Other Stocks to Consider
Better-ranked companies in the diversified chemical space include Innospec Inc. (IOSP - Free Report) , Innophos Holdings Inc and The Chemours Company (CC - Free Report) , all sporting a Zacks Rank #1 (Strong Buy).
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>