The Air Products and Chemicals (APD) Market is Winning but Lagging: What You Need to Know

Air Products and Chemicals (APD) closed the last day of trading at $225.20, moving +1.45% from the previous trading session. This change lagged the S&P 500’s 1.92% gain on the day. Meanwhile, the Dow Jones gained 2.15% and the Nasdaq, a technology-heavy index, added 0.12%.

As of today, shares of the industrial, medical and other gases seller were down 5.58% in the past month. Meanwhile, the basic materials sector lost 20.12%, while the S&P 500 gained 1.54%.

Wall Street will be looking for positivity from Air Products and Chemicals as its next earnings release date approaches. That is expected to be August 4, 2022. The company is expected to report EPS of $2.61, up 12.99% from the prior year quarter. Meanwhile, Zacks consensus estimate for revenue calls for net sales of $3.08 billion, up 18.12% from the prior year period.

Looking to the full year, our Zacks consensus estimates suggest analysts are expecting earnings of $10.26 per share and revenue of $12.07 billion. These totals would mark changes of +13.75% and +16.93%, respectively, from last year.

Investors might also notice recent changes in analyst estimates for Air Products and Chemicals. These recent revisions tend to reflect the evolving nature of short-term trading trends. With this in mind, we can view positive estimate revisions as a sign of optimism about the company’s business outlook.

Our research shows that these estimate changes are directly correlated to short-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes into account these estimation changes and provides a clear and actionable scoring model.

The Zacks ranking system ranges from #1 (strong buy) to #5 (strong sell). It has a remarkable, externally audited track record of success with No. 1 stocks delivering an average annual return of +25% since 1988. Over the past 30 days, our consensus EPS projection is down 0.06%. Air Products and Chemicals is currently a Zacks Rank #3 (Hold).

Digging into the valuation, Air Products and Chemicals currently has a Forward P/E ratio of 21.64. For comparison, its industry has an average Forward P/E of 8.85, meaning Air Products and Chemicals is trading at a premium to the group.

We can also see that ODA currently has a PEG ratio of 1.69. This popular measure is similar to the widely known P/E ratio, except that the PEG ratio also takes into account the company’s expected earnings growth rate. The Chemicals – Diversified industry currently had an average PEG ratio of 0.97 as of yesterday’s close.

The chemical industry – diversified is part of the basic materials sector. This industry currently has a Zacks Industry Rank of 186, which places it in the bottom 27% of all 250+ industries.

The Zacks Industry Rankings are ranked from best to worst in terms of the average Zacks Ranking of individual companies in each of these industries. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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