Industrial gas producer and supplier Praxair Inc. (PX - Analyst Report) recently announced that it has started operating a new hydrogen plant in Peru. The plant has been set up for one of the largest producers of hydrocarbon fuels and petrochemicals in the world, Repsol.
As revealed, Praxair’s new steam methane reformer has a daily production capacity of 12 million standard cubic feet of hydrogen. The plant is located at Callao-based Pampilla Refinery of Repsol, which primarily engages in the production of gasoline, liquefied petroleum gas, jet fuel, kerosene, diesel, asphalts and low-sulfur diesel fuel.
In addition to production of hydrogen, Praxair’s facility, located close to the hydrogen plant will produce food-grade liquid carbon dioxide by purifying carbon dioxide generated in the steam methane reformer. The new plant will strengthen Praxair’s foothold in Peru.
We believe such expansionary initiatives will help Praxair meet the growing preference of customers for its world-class products and services. Also, increasing application of industrial gases in manufacturing, transportation, healthcare, food & beverages, and metal fabrication industries will prove to be a boon for industrial gas producers.
However, we believe that Praxair’s exposure to severe headwinds is restricting its growth. The stock currently carries a Zacks Rank #4 (Sell).
Stocks to Consider
Some better-ranked stocks in the chemical industry include The Chemours Company (CC - Snapshot Report) , Innophos Holdings Inc (IPHS - Snapshot Report) and Olin Corporation (OLN - Snapshot Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Chemours Company has a positive average earnings surprise of 144.74% for the last four quarters. Also, earnings expectations for 2016 and 2017 have improved over the past 60 days.
Innophos Holdings Inc’s financial performance has been impressive in the last quarter, with a positive earnings surprise of 22%. Also, earnings estimate for 2016 have been revised upward over the last 60 days.
Olin Corporation has witnessed positive revisions in earnings estimates for 2016 and 2017 over the past 60 days.
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