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Air Products (APD) Hits New 52-Week High: What's Driving It?

Shares of Air Products and Chemicals, Inc . APD scaled a fresh 52-week high of $165.54 on Jan 2, before eventually closing the day at $165.51.

Air Products has a market cap of roughly $36.2 billion. Average volume of shares traded in the last three months is around 903.8K. The company has an expected long-term EPS growth of 14.1%.

Notably, the company has an impressive earnings surprise history as it has topped the Zacks Consensus Estimate in three of the trailing four quarters, with an average positive surprise of 2.6%.

Shares of Air Products have rallied 8.3% in the past three months, outperforming the industry 's 3.9% growth.

Driving Factors

Air Products has built a strong project backlog. These projects are anticipated to be accretive to earnings and cash flow over the next few years. Moreover, strategic investments in high-return projects, new business deals and acquisitions are expected to drive results in fiscal 2018.

The company is expanding its footprint in China. The company has landed a second long-term oxygen and nitrogen supply contract with a leading global materials supplier in Guangdong in South China. The move will help to strengthen its position in the strategic industrial base as well as relationship with this global customer. Air Products and Yankuang Group also entered into an agreement for a $3.5 billion coal-to-syngas production facility to be constructed in Yulin City, Shaanxi Province, China.

Moreover, Air Products inked a long-term gas supply agreement with Huntsman Corporation HUN in July 2017. Per the deal, Air Products will build, own and operate a new steam methane reformer and cold box in Geismar, LA. Air Products facilities which will supply hydrogen, carbon monoxide and steam to Huntsman's Geismar operations are anticipated to be onstream in January 2020. The new state-of-the-art facility will provide high reliability and sustainability with enhanced energy efficiency and will aid lower emissions.

The company also remains on track in delivering on cost-reduction programs, which is likely to support margins. The company is making a good progress with its $600 million cost-cutting program and has already delivered more than $475 million of cost savings. Additionally, it plans to deliver the balance in next two-three years.

Moreover, Air Products has significant amount of cash to invest in core industrial gases business. The company expects to have at least $8 billion to deploy in strategic, high-return opportunities (including acquisitions and large industrial gases projects) to create shareholders value over the next three years.

Air Products and Chemicals, Inc. Price and Consensus

Air Products and Chemicals, Inc. Price and Consensus | Air Products and Chemicals, Inc. Quote

Zacks Rank & Other Stocks to Consider

Air Products carries a Zacks Rank #2 (Buy).

Some better-ranked stocks in the basic materials space are Kronos Worldwide Inc. KRO and Koppers Holding Inc. KOP , both sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Kronos Worldwide has expected long-term earnings growth of 5%. Its shares have skyrocketed 104.6% over the past year.

Koppers has expected long-term earnings growth of 18%. Shares of the company have rallied 22% in the past year.

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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.


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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