Wells Fargo & Company has downgraded its rating on shares of Air Products and Chemicals (NYSE: APD) from “overweight” to “equal weight,” according to a research report released on Friday, November 6, 2023. The firm has set a price target of $250.00 for the basic materials company, signaling a more cautious outlook amid a fluctuating market.
This latest downgrade follows similar actions from other financial institutions. On December 11, UBS Group reduced its rating for Air Products from “buy” to “neutral,” slashing its price target from $310.00 to $250.00. In the previous week, Deutsche Bank Aktiengesellschaft announced a target price of $255.00 for the company, while Goldman Sachs Group set a higher target of $335.00 back on October 1. Weiss Ratings also maintained a “hold (c-)” rating as of December 16.
Overall, one analyst has assigned a “Strong Buy” rating to Air Products and Chemicals, while seven analysts rated it as a “Buy,” seven gave it a “Hold,” and one issued a “Sell” rating. Currently, the consensus rating stands at “Moderate Buy,” with an average target price of $292.47 based on data from MarketBeat.com.
Recent Financial Performance
Air Products and Chemicals reported its latest earnings results on November 6. The company announced earnings per share (EPS) of $3.39, slightly exceeding the consensus estimate of $3.38. Despite this positive performance, the company faced challenges with a net margin of -3.28% and a return on equity of 15.18%. Revenue for the quarter reached $3.13 billion, falling short of analysts’ expectations of $3.18 billion. This reflects a year-over-year revenue decline of 0.6%.
Looking ahead, Air Products and Chemicals has provided guidance for the first quarter of fiscal 2026, projecting EPS between $2.950 and $3.100. For the entire fiscal year, the company anticipates EPS to range from $12.850 to $13.150. Analysts expect the firm to report $12.69 EPS for the current year.
Dividend Details and Institutional Holdings
In addition to the recent rating changes, Air Products and Chemicals announced a quarterly dividend of $1.79 per share, set to be paid on February 9, 2024. Investors on record as of January 2, 2024, will qualify for this dividend, which represents an annualized total of $7.16 and a yield of 3.0%. Currently, the company’s payout ratio stands at -402.25%, indicating that it is paying out more in dividends than it is earning.
Institutional trading activity has also seen notable movements. Several hedge funds have recently adjusted their positions in Air Products and Chemicals. The Saudi Central Bank acquired a new stake valued at approximately $26,000 in the first quarter. Traub Capital Management LLC and Twin Peaks Wealth Advisors LLC each purchased new positions valued at about $28,000. Abound Wealth Management increased its stake by 292.3% in the third quarter, now holding 102 shares worth $28,000 after acquiring an additional 76 shares.
Institutional investors currently hold 81.66% of Air Products and Chemicals’ stock, illustrating strong institutional interest in the company.
Air Products and Chemicals, headquartered in Allentown, Pennsylvania, is a leading global supplier of industrial gases and related equipment. The company specializes in the production and delivery of atmospheric gases, including oxygen, nitrogen, and argon, as well as a variety of specialty gases for diverse industrial applications. Its operations encompass the design and management of gas production facilities and merchant distribution networks, catering to customers requiring reliable, high-purity gases and integrated supply solutions.
As analysts continue to assess the potential impacts of economic conditions and market dynamics, investors remain watchful of Air Products and Chemicals’ performance in the coming quarters.
