Shares of Air Products and Chemicals, Inc. APD scaled a fresh 52-week high of $276.86 during the trading session on Jul 8, before retracting to close at $269.79.
The Zacks Rank #2 (Buy) stock has a market cap of $59.6 billion. Average volume of shares traded in the past three months is around 1,104K. The company also has expected long-term earnings per share growth rate of 8.9%.
Its shares have rallied 19.3% in the past year against the industry’s 9.4% decline.
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Let’s take a look into the factors that are driving the industrial gases giant.
What’s Favoring the Stock?
Air Products’ productivity actions, investments in high-return projects and project wins are expected to drive its fiscal 2020 results. New projects are contributing to its volume growth. The company is also boosting productivity to improve its cost structure. It is seeing the positive impacts of its productivity actions, and is expected to benefit from additional productivity and cost improvement programs in fiscal 2020.
Notably, the Zacks Consensus Estimate for earnings of $8.48 for fiscal 2020 suggests growth of 3.3% from the year-ago reported figure.
The company is also poised for growth on the back of its project investments. Notably, its project in the United States, which is worth $500 million, showcases its core strengths and capabilities for supplying nitrogen from an air separation unit and hydrogen from a steam methane reformer. The project will likely boost the size and supply capacity of the company’s extensive hydrogen pipeline system in the Gulf Coast.
Air Products also recently inked a deal with ACWA Power and NEOM for a $5-billion green hydrogen-based ammonia manufacturing facility, powered by renewable energy. Notably, the project will produce 650 tons of hydrogen per day by electrolysis using Thyssenkrupp technology, nitrogen by air separation using Air Products’ technology, and 1.2 million tons per year of green ammonia using Haldor Topsoe technology.
The company also completed the buyout of five steam methane reformer hydrogen production plants for $530 million from PBF Energy. The PBF deal is expected to be accretive to the company’s bottom line in fiscal 2020. Air Products also expects to complete the $12-billion Jazan gasification project in Saudi Arabia by October 2020.
The company has a total available capacity to deploy (over fiscal 2018-2022) around $18 billion in high-return investments aimed at creating significant shareholder value. It has already spent or committed roughly 65% of the capacity.
Air Products and Chemicals, Inc. Price and Consensus
Other Stocks to Consider
Some other top-ranked stocks in the basic materials space are AngloGold Ashanti Limited AU, Sandstorm Gold Ltd SAND and Harmony Gold Mining Company Limited HMY.
AngloGold has a projected earnings growth rate of 109.9% for the current year. The company’s shares have surged around 76% in a year. It currently has a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Sandstorm Gold has a projected earnings growth rate of 55.6% for the current year. The stock has gained around 79% in a year. It currently has a Zacks Rank of 2.
Harmony Gold has an expected earnings growth rate of 264.3% for 2020. The company’s shares have gained 146.4% in the past year. It is presently a Zacks #2 Ranked player.
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