Praxair (PX) Scales 52-Week High: What's Driving the Rally?
Shares of Praxair, Inc. PX scaled a 52-week high of $169.26 during the trading session on Oct 2, before retracing a bit to close at $169.03. The prime reason behind this surge can be attributed to the recently-received anti-trust clearance for the proposed business combination between Praxair and Linde AG.
The company has a market cap of $48.6 billion. Over the last three months, its average volume of shares traded has been approximately 1.5M. Also, Praxair surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average positive earnings surprise being 3.46%.
Notably, the stock has rallied around 19% in a year’s time, higher than the S&P 500’s gain of 16%. Additionally, Praxair has outperformed the 4% decline recorded by the industry during the same time frame.
Investors are optimistic on this Zacks Rank #2 (Buy) company, backed by Praxair’s solid backlog and new order wins. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
What Led to the 52-Week High?
In June 2017, Praxair signed a business combination agreement with Linde to form a new holding entity. The all-stock transaction will combine Praxair's efficient operating model and Linde's expertise in engineering and technology, creating a leading industrial gas company with a robust international presence, a large customer base, and solid financial flexibility. Moreover, the merger will likely close in second-half 2018.
Praxair, Inc. Price, Consensus and EPS Surprise
Praxair, Inc. Price, Consensus and EPS Surprise | Praxair, Inc. Quote
Notably, Praxair has made substantial progress on the merger with Linde and achieved additional regulatory approvals. Recently, the proposed merger received antitrust clearance in China, subject to certain conditions. A few days back, Praxair and Linde entered into an agreement to sell additional assets to a consortium of Messer Group GmbH and CVC Capital Partners. With this, the companies moved another step ahead toward obtaining the U.S. antitrust approval.
Also, Praxair posted a backlog of $1.7 billion in second-quarter 2018, up around 13% year over year. The company won three new onsite projects and started work on the CNOOC project during the quarter. It expects to win new on-site business opportunities, particularly in the U.S. Gulf Coast.
The above-mentioned tailwinds have raised investors’ optimism in the stock and are anticipated to boost the company’s share price in the days ahead.
Other Stocks to Consider
Some other top-ranked stocks in the same sector are Quaker Chemical Corporation KWR, Air Products and Chemicals, Inc. APD and Cabot Corporation CBT. While Quaker Chemical sports a Zacks Rank #1, Air Products and Cabot Corporation carry a Zacks Rank # 2.
Quaker Chemical has a long-term earnings growth rate of 11%. The stock has rallied 35% in a year’s time.
Air Products has a long-term earnings growth rate of 13.3%. The company’s shares have gained 11% during the past year.
Cabot Corporation has a long-term earnings growth rate of 11%. Its shares have gained 10% over the past year.
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