Shares of industrial, medical and specialty gases, and
) reached a new 52-week high of $112.60, on Dec 27. Airgas has a
market cap of $8.2 billion. Average volume of shares traded over
the last three months stood at approximately 336.522.
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Shares of Airgas started escalating following its strong fiscal
second quarter results on Oct 23. Airgas posted adjusted earnings
of $1.25 a share in the second quarter, up 19% from $1.05 in the
year-ago quarter. Revenues in the reported quarter grew 4% year
over year to $1.28 billion. Acquisitions aided sales growth by
2%, with organic sales up 2% and a 4% increase in gas and rent,
but were partially offset by a 2% decline in hardgoods.
Airgas expects adjusted earnings per share for the third quarter
of fiscal 2014 to increase 11% - 15% year over year to $1.15 -
$1.20. For fiscal 2014, Airgas expects earnings in the range of
$4.85-$5.00, reflecting 11% - 15% annual growth.
Airgas will benefit from its strong acquisition pipeline. The
company has a current target of $150 million in acquired sales in
fiscal 2014. Management is optimistic about reaching its target
in fiscal 2014 on the back of a strong pipeline. Airgas' SAP
implementation is now almost complete, and the company expects to
realize a minimum of $75 million in annual run-rate operating
Furthermore, strategic product sales (safety products, CO2,
medical, bulk and specialty gas) now generate over 40% of overall
sales. These strategic products have a strong growth profile due
to their use in favorable customer segments, application
development, increasing environmental regulation, strong
cross-sell opportunities or a combination of these factors.
Non-residential (energy & infrastructure) construction sector
accounts for 14% of Airgas sales. Airgas is seeing signs that
nonresidential construction activity will improve next year.
Order flow has started for a couple of large projects and a
number of rumored large projects have now moved into the planning
and permitting stages. Airgas will benefit if it can win these
Recently, Airgas also declared that its operating units will
increase the prices on helium by 20%. This increase is for
countering rising costs for obtaining and distributing the gas.
Currently, Airgas carries a Zacks Rank #3 (Hold). Some
better-ranked stocks in the same industry are
Asahi Kasei Corporation
Johnson Matthey plc
Clean Diesel Technologies Inc.
). While Asahi Kasei and Johnson Matthey carry a Zacks Rank #1
(Strong Buy), Clean Diesel holds a Zacks Rank #2 (Buy).