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Air Products Hits 52-Week High: What's Driving the Stock?

Zacks Equity Research

Shares of Air Products and Chemicals, Inc. APD scaled a fresh 52-week high of $188.17 on Mar 27, before closing the session at $187.65.

The company has a market cap of roughly $41.2 billion and average volume of shares traded in the past three months was around 1,180.3K. The company has expected long-term earnings per share (EPS) growth rate of 13%.

The stock has gained 18.7% in the past year, against the industry’s 13.1% decline.

Driving Factors

Upbeat outlook, strategic investments and new business deals are contributing to the rally in Air Products’ shares.

Air Products’ profits from continuing operations jumped more than two-fold year over year to $347.5 million or $1.57 per share in first-quarter fiscal 2019 (ended Dec 31, 2018).

Air Products continues to expect adjusted EPS for fiscal 2019 in the range of $8.05-$8.30, reflecting a 10% increase at the midpoint year over year. Also, the company expects adjusted EPS in the range of $1.80-$1.90 for second-quarter fiscal 2019, up 8% at the midpoint year over year.

Air Products’ strategic investments in high-return projects, new business deals and acquisitions should drive its fiscal 2019 results. The Lu'An syngas project in China, which is now fully onstream, contributed to the results in the company’s Industrial Gases – Asia segment in the fiscal first quarter. The company expects the Lu'An project to contribute more than 25 cents per share to its earnings in fiscal 2019.

Earlier this month, the company completed the buyout of ACP Europe SA, which is the largest independent carbon dioxide business in Continental Europe. The buyout enables the company to serve existing customers better and tap new industrial gas growth opportunities. Customers will gain from a broader liquid carbon dioxide supply position across additional regions of Europe as well as greater density throughout Continental Europe.

Air Products noted that the acquisition provides it a strong platform to pursue further industrial gas growth in Europe and deliver value to customers.

In February 2019, the company announced that it has successfully achieved the mechanical completion of the world’s largest industrial gas complex in Jazan, Saudi Arabia. Moreover, Air Products completed the world-scale project without a lost time injury in 25 million worker hours. The industrial gas complex is expected to be onstream in phases in 2019.

Air Products and Chemicals, Inc. Price and Consensus


Air Products and Chemicals, Inc. Price and Consensus | Air Products and Chemicals, Inc. Quote


Zacks Rank & Key Picks

Air Products currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the basic materials space are Kirkland Lake Gold Ltd. KL, Ingevity Corporation NGVT and Materion Corporation MTRN, all currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Kirkland has an expected earnings growth rate of 8.8% for 2019. The company’s shares have surged 116.7% in the past year.

Ingevity has an expected earnings growth rate of 17.9% for the current year. The company’s shares have rallied 45.1% in a year’s time.

Materion has an expected earnings growth rate of 12.6% for 2019. Its shares have gained 14% in a year’s time.

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