As you might know, Air Products and Chemicals, Inc. (NYSE:APD) recently reported its first-quarter numbers. Air Products and Chemicals reported US$2.3b in revenue, roughly in line with analyst forecasts, although statutory earnings per share (EPS) of US$2.14 beat expectations, being 3.8% higher than what analysts expected. Analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what analysts are expecting for next year.
Taking into account the latest results, the most recent consensus for Air Products and Chemicals from 21 analysts is for revenues of US$9.37b in 2020, which is an okay 4.7% increase on its sales over the past 12 months. Statutory earnings per share are expected to ascend 10% to US$9.45. In the lead-up to this report, analysts had been modelling revenues of US$9.51b and earnings per share (EPS) of US$9.40 in 2020. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
Analysts reconfirmed their price target of US$254, showing that the business is executing well and in line with expectations. The consensus price target just an average of individual analyst targets, so - considering that the price target changed, it would be handy to see how wide the range of underlying estimates is. The most optimistic Air Products and Chemicals analyst has a price target of US$280 per share, while the most pessimistic values it at US$195. As you can see, analysts are not all in agreement on the stock's future, but the range of estimates is still reasonably narrow, which could suggest that the outcome is not totally unpredictable.
Zooming out to look at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up both against past performance, and against industry growth estimates. One thing stands out from these estimates, which is that analysts are forecasting Air Products and Chemicals to grow faster in the future than it has in the past, with revenues expected to grow 4.7%. If achieved, this would be a much better result than the 1.1% annual decline over the past five years. Compare this against analyst estimates for the wider market, which suggest that (in aggregate) market revenues are expected to grow 3.5% next year. Although Air Products and Chemicals's revenues are expected to improve, it seems that analysts are also expecting it to grow faster than the wider market.
The Bottom Line
The most obvious conclusion from these results is that there's been no major change in the business' prospects in recent times, with analysts holding earnings per share steady, in line with previous estimates. Happily, there were no major changes to revenue forecasts, with analysts still expecting the business to grow faster than the wider market. The consensus price target held steady at US$254, with the latest estimates not enough to have an impact on analysts' estimated valuations.
Even so, the longer term trajectory of the business is much more important for the value creation of shareholders. At Simply Wall St, we have a full range of analyst estimates for Air Products and Chemicals going out to 2024, and you can see them free on our platform here..
It might also be worth considering whether Air Products and Chemicals's debt load is appropriate, using our debt analysis tools on the Simply Wall St platform, here.
If you spot an error that warrants correction, please contact the editor at email@example.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.
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