Air Products: Long-Term Tailwinds Outweigh Risks From Europe And Inflation

Summary

• Air Products shares have fallen the past year due to inflation concerns, but its long-term growth potential makes this a compelling opportunity.
• The business continues to perform well, even growing operating income in Europe, as its business is insulated from energy price movements, though volumes may weaken.
• Government policy will be a further tailwind, incentivizing companies to use APD's clean hydrogen.
• With an ability to raise product prices if projects cost more, the inflation risk of its backlog is manageable.
• I would be a buyer down to a DCF yield of 5%, or $300 a share.

schulzhattingen

Shares of Air Products and Chemicals (NYSE:APD) have lost about 14% of their value over the past year, pushing them back below levels reached pre-COVID in early 2020. Air Products is a capital-intensive company, which has led to concerns around how

Analyst’s Disclosure:I/we have a beneficial long position in the shares of APD either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.