Air Products and Chemicals, Inc. (APD) Buy or Sell Stock Guide

Last updated: Apr 12, '19

Are you looking for the analysis of Air Products and Chemicals, Inc. (APD) stock? Are you wondering what the bulls and the bears say about it?

If so, you came to the right place. In this stock guide, we will share with you 5 reasons to buy and 11 reasons to sell APD stock. You’ll get a perspective on what the bulls and the bears say about it.

The analysis below may be also helpful to you if you have any of the following questions about APD stock:

  • Is APD a buy or a sell?
  • Should I sell or hold APD stock today?
  • Is APD a good buy / investment?
  • What are APD analyst opinions, recommendations and ratings?

Let’s start with the bull case. Here are the reasons to buy APD stock:

1. The industrial gas industry has consolidated significantly since the late 1990s, and the top four players now control nearly 85% of the market.

2. Air Products has built a strong oxygen presence in China. It has among the highest market share in new projects in the region, which will benefit the firm as coal gasification activity increases.

3. Air Products supplies hydrogen to roughly 90% of U.S. Gulf refiners and operates the only major hydrogen pipeline serving the Canadian oil sands region. It is well positioned to benefit from rising North American oil and gas production and processing.

4. APD forward dividend yield is 2.43%, higher than the industry (0.76%) and sector (0.25%) forward dividend yields. See APD forward dividend chart.

5. APD average analyst rating is Buy. See APD analyst rating chart.

Now that you understand the bull case, let’s look at the reasons to sell APD stock (i.e., the bear case):

1. Air Products has the largest exposure to the Canadian oil sands among its peers. The significant decline in global energy prices and uncertain end-market demand create earnings uncertainty and management challenges.

2. Air Liquide's acquisition of Airgas and the potential Linde-Praxair merger could leave Air Products with the smallest global footprint and customer base among industrial gas majors.

3. Following aggressive restructuring and a series of divestments, Mr Ghasemi must now rely on traditional avenues for growth in its core business, which may not excite investors

4. APD stock price ($193.55) is at the 52-week high. Perhaps now is a good time to sell? See APD price chart.

5. APD quarterly revenue growth was 0.30%, lower than the industry and sector average revenue growth (6.64% and 2.83%, respectively). See APD revenue growth chart.

6. APD profitability is declining. The YoY profit margin change was -19.87pp. See APD profitability chart.

7. APD forward P/E ratio is 20.66, and it’s high compared to its industry peers’ P/E ratios. See APD forward P/E ratio chart.

8. APD Price/Book ratio is 3.86, and it’s high compared to its industry peers’ P/B ratios. See APD forward Price/Book ratio chart.

9. APD Price/Sales ratio is 4.71, and it’s high compared to its industry peers’ P/S ratios. See APD forward Price/Sales ratio chart.

10. APD PEG ratio (P/E adjusted for growth) is 1.91, and it’s high compared to its industry peers’ PEG ratios. See APD PEG chart.

11. APD average analyst price target ($190.05) is below its current price ($193.55). See APD price target chart.

Now let's look at the key statistics for APD:

Metrics APD
Price $199.66
Average Price Target / Upside $190.05 / -4.81%
Average Analyst Rating Buy
Industry Chemicals
Sector Basic Materials
Number of Employees 16,300
Market Cap $43.51B
Forward P/E Ratio 21.39
Price/Book Ratio 4.87
PEG 2.03
Revenue (TTM) $8.94B
YoY Quarterly Revenue Growth 0.3%
Profit Margin 18.92%

What are your thoughts on APD?

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