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Praxair's Prospects Face Risks from Near-Term Headwinds

We issued an updated research report on industrial gas producer and supplier Praxair Inc.PX on Nov 24, 2015. The company is engaged in production and distribution of industrial gases, primarily in North America, South America, Europe and Asia.

Praxair's main strengths include its diversified product portfolio, zeal to invent products and improvise services, and expand globally through organic and inorganic means as well as a well-trained management team. Banking on these positives, the company aims to generate revenues of $16 billion and double-digit growth in earnings per share by 2017.

However, Praxair's prospects are exposed to certain near-term headwinds. The company faces risks from unfavorable foreign currency movements, geopolitical issues in foreign end markets, high debt levels leading to inflated financial obligations and stiff competition from domestic and international players in the industry.

In addition, weak global economic conditions resulted in difficult operating conditions for companies manufacturing and distributing industrial products in third-quarter 2015. Praxair's top and bottom line will likely face adverse impact, if such weakness persists.

Praxair, with a market capitalization of $32.5 billion, currently carries a Zacks Rank #4 (Sell). Some of the company's prime competitors are performing well, having gained high Zacks investment rankings. Better-ranked stocks in the chemical-diversified industry include Celanese Corporation CE , Innospec Inc. IOSP and The Dow Chemical Company DOW . While both Celanese Corporation and Innospec sport a Zacks Rank #1 (Strong Buy), The Dow Chemical Company carries a Zacks Rank #2 (Buy).

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DOW CHEMICAL (DOW): Free Stock Analysis Report

PRAXAIR INC (PX): Free Stock Analysis Report

CELANESE CP-A (CE): Free Stock Analysis Report

INNOSPEC INC (IOSP): Free Stock Analysis Report

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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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