Key Stats for APD Stock
- Year-to-Date Performance: 12%
- 52-Week Range: $229 to $321
- Valuation Model Target Price: $349
- Implied Upside: 27%
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What Happened?
Air Products and Chemicals stock traded near $276 this week and is now up about 12% year to date as investors reacted to stronger first quarter fiscal 2026 earnings and reaffirmed guidance.
The stock’s advance reflects renewed confidence in pricing execution, productivity gains, and margin expansion despite helium headwinds and a mixed macro backdrop.
The shares moved higher specifically because earnings came in ahead of expectations and management reaffirmed its full-year outlook.
This week, Air Products reported adjusted EPS of $3.16, up 10% year over year, with adjusted operating income rising 12% and operating margin expanding to 24.4%.
Management reaffirmed full-year EPS guidance of $12.85 to $13.15, implying 7% to 9% growth, and guided second quarter EPS to $2.95 to $3.10, representing 10% to 15% growth.
CEO Eduardo Menezes called the quarter “a solid start to our fiscal year,” highlighting pricing actions and productivity gains that offset helium pressure.
Institutional positioning also provided context for the move. Vanguard increased its stake to 22,000,734 shares, representing about 9.89% ownership worth roughly $6.0 billion, while NEOS Investment Management raised its position by 47.2% to 25,242 shares.
Assetmark Inc. increased its holdings by 13.4% to 129,605 shares, and Wedbush Securities boosted its stake by 64.3%. At the same time, Aberdeen Group reduced its position by 18.5%, CIBC World Market cut its stake by 92.8%, and director Ridge Lp Mantle sold 70,175 shares, trimming ownership by 42.9%. The mix of accumulation and trimming suggests portfolio repositioning rather than broad distribution.
Overall, the year-to-date advance reflects improving earnings visibility and stronger margin execution in 2026, while investors continue to monitor capital discipline and large project economics as the primary drivers for performance this year.
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Is APD Undervalued?
Under valuation assumptions, the stock is modeled using:
- Revenue Growth (CAGR): 5.3%
- Operating Margins: 25.9%
- Exit P/E Multiple: 20.8x
Revenue is projected to expand from about $12.6 billion in 2026 toward roughly $16.5 billion by 2030, supported by hydrogen project ramp-ups, semiconductor gas demand, and contractual pricing escalators embedded in long-term supply agreements.
Industrial gas contracts are typically structured with take-or-pay features, which can stabilize revenue once assets move from construction to full utilization.
A key development in 2026 is the company’s emphasis on capital discipline and project optimization. Management expects capital expenditures to total about $4 billion this fiscal year, with spending declining meaningfully after major clean energy projects in Canada and the Netherlands move closer to completion.
As those assets transition from heavy investment phases into revenue-generating operations, operating leverage could improve free cash flow and strengthen return metrics.
Electronics demand remains another important driver. Management noted accelerating semiconductor-related activity and ongoing project execution in Asia, where large chip fabrication facilities require high-purity gases and air separation units.
Increased utilization of these assets can enhance margin performance given the fixed-cost nature of the business.
Based on these inputs, the model estimates a target price of $349, implying about 27% upside from current levels near $276, suggesting the stock appears modestly undervalued.
At current levels, Air Products appears positioned for steady performance in 2026, with results likely driven by margin durability, disciplined capital allocation, and the transition of large projects into cash-generating operations.
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How Much Upside Does APD Stock Have From Here?
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- Operating Margins
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