Key Takeaways:
- Air Products and Chemicals, Inc. provides atmospheric gases, process and specialty gases, equipment, and related services across key global industrial markets.
- APD stock could reasonably reach $405 per share by September 2030, based on our valuation assumptions.
- This implies a total return of 45.6% from today’s price of $278, with an annualized return of 8.4% over the next 4.7 years.
Air Products and Chemicals, Inc. (APD) is a world‑leading industrial gases company that serves refining, chemical, metals, manufacturing, electronics, energy production, medical, food, and other end markets worldwide.
The company produces oxygen, nitrogen, argon, hydrogen, helium, carbon dioxide, carbon monoxide, syngas, and specialty gases, and it also designs and manufactures equipment for air separation, hydrocarbon recovery, natural gas liquefaction, and liquid hydrogen and helium logistics.
The stock has faced recent pressure, but the long‑term model points to mid‑single‑digit annual revenue growth and stable margins supported by large onsite projects and long‑term contracts.
Here’s why Air Products and Chemicals stock could provide solid returns through 2030 as it monetizes its industrial gases portfolio and executes on its capital projects while maintaining a disciplined financial profile.
What the Model Says for APD Stock
We analyzed the upside potential for Air Products and Chemicals stock using valuation assumptions based on its core industrial gases focus, long‑term contract visibility, and capital allocation framework.
Based on estimates of 5.3% annual revenue growth, 26.0% operating margins, and a normalized P/E multiple of 20.9x, the model projects APD’s share price could increase from $278 to $338 by September 2028.
That would be a 21.6% total return, or a 7.7% annualized return over the next 2.7 years.
Our Valuation Assumptions
TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.
Here’s what we used for Air Products and Chemicals stock:
1. Revenue Growth: 5.3%
APD’s historical revenue trends show modest growth over longer periods, with a recent one‑year decline of 0.5%, a 6.3% five‑year CAGR, and a 2.0% ten‑year CAGR.
Based on analysts’ consensus estimates, revenue growth is set at 5.3% annually through September 2028, which sits between the company’s long‑term average and its more recent five‑year performance.
This assumption reflects a normalization from the latest dip while still remaining grounded in historical trends rather than assuming a sharp acceleration.
2. Operating Margins: 26%
APD’s operating profitability has been supported by its industrial gases portfolio and long‑term contracts, with recent margin performance benefiting from efficiency initiatives and portfolio focus.
Based on analysts’ consensus estimates, we use an operating margin of 26.0% by 2028, which is consistent with APD’s goal of maintaining strong profitability as it prioritizes core gases projects and disciplined capital deployment.
This level implies stable, high‑teens to mid‑20s margins rather than aggressive expansion, so it stays aligned with the company’s established margin profile.
3. Exit P/E Multiple: 10x
APD currently trades around a P/E multiple of 20.9x in the Guided Valuation, which reflects the market’s view of its defensive industrial gases franchise and long‑duration contracts.
Based on analysts’ consensus estimates, we assume this same 20.9x multiple at the end of the forecast period, so expected returns primarily come from earnings growth rather than a large re‑rating.
This approach keeps the valuation anchored to today’s market perspective and avoids relying on a higher future multiple to make the investment case.
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What Happens If Things Go Better or Worse?
Different scenarios for APD stock through 2030 show varied outcomes based on revenue growth, margin performance, and valuation changes (these are estimates, not guaranteed returns):
- Low Case: Industrial demand softens, new projects underperform, and valuation remains constrained → 3.3% annual returns
- Mid Case: Core gases projects ramp as planned and margins expand modestly → 8.4% annual returns
- High Case: Strong project execution, resilient demand, and a more favorable multiple → 13.1% annual returns
In the mid‑case scenario, APD’s expected annual return of 8.4% falls below the 10% threshold that many investors might look for in an attractive opportunity, but it still suggests the potential for solid mid‑single‑digit to high‑single‑digit annualized performance supported by earnings growth and dividends.
The high‑case scenario approaches the 15% “really interesting” zone, which would require stronger‑than‑base‑case execution and a more supportive macro environment, while the low‑case outcome of 3.3% annual returns would imply that the stock remains pressured if growth or margins disappoint.
See what analysts think about APD stock right now (Free with TIKR) >>>
How Much Upside Does Sanofi Stock Have From Here?
With TIKR’s new Valuation Model tool, you can estimate a stock’s potential share price in under a minute.
All it takes is three simple inputs:
- Revenue Growth
- Operating Margins
- Exit P/E Multiple
If you’re not sure what to enter, TIKR automatically fills in each input using analysts’ consensus estimates, giving you a quick, reliable starting point.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
