Air Products and Chemicals, Inc. (APD)
Valuation Overview•Is Air Products and Chemicals, Inc. Overvalued or Undervalued?
Priced at a premium to peer multiples and intrinsic cash flows, demanding strong execution to justify current levels.
Fragile underlying quality score of 35/100; weak margins or elevated debt leverage warrant caution.
Analysts remain bullish, forecasting further upside expansion with consensus targets suggesting solid gains.
Verdict: Mixed fundamental profile with offsetting strengths and weaknesses.
Wall Street is highly bullish, projecting significant upside alongside robust expected earnings growth. This is paired with healthy capital returns, anchored by a strong, well-covered dividend yield.
APD demonstrates adequate business quality with stable profitability. However, this is severely offset by a highly leveraged balance sheet (Debt/EBITDA > 4.0x) and elevated financial risk.
The company is facing top-line contraction (-1.8% 3Y CAGR) paired with stable bottom-line earnings. The company maintains healthy operational efficiency with a 18.4% operating margin.
| Financial Metric | Trend (12Q) | Latest Qtr | 1Y Growth | 3Y CAGR | 5Y CAGR | 10Y CAGR |
|---|---|---|---|---|---|---|
| Revenue | $3.2B | -0.5% | -1.8% | +6.3% | +4.4% | |
| EBITDA | $1.1B | — | -42.8% | — | — | |
| Net Income | $710.4M | -110.3% | — | — | — | |
| EPS (Diluted) | $3.19 | -110.3% | — | — | — | |
| Free Cash Flow | $2.4B | -19.5% | — | — | — |
| Metric | TTM | 3Y Avg | 5Y Avg | 10Y Avg |
|---|---|---|---|---|
| Gross Margin | 32.0% | 31.3% | 30.1% | 30.9% |
| Operating Margin | 18.4% | 16.5% | 18.0% | 19.9% |
| Net Margin | 16.9% | 15.5% | 16.9% | 18.8% |
| FCF Margin | 8.9% | -22.9% | -11.5% | 0.3% |
| Quarter | EPS Est. | EPS Act. | Surprise | EPS | Rev |
|---|---|---|---|---|---|
| Q2'26Latest | $3.06 | $3.20 | +4.6% | ||
| Q1'26 | $3.04 | $3.16 | +3.9% | ||
| Q4'25 | $3.38 | $3.39 | +0.3% | ||
| Q3'25 | $2.99 | $3.09 | +3.3% | ||
| Q2'25 | $2.83 | $2.69 | -4.9% | ||
| Q1'25 | $3.13 | $2.86 | -8.6% | ||
| Q4'24 | $3.48 | $3.56 | +2.3% | ||
| Q3'24 | $3.03 | $3.20 | +5.6% |
Total return is +4.4% (1Y), lagging the benchmark by -20.6%
| Period | Total Return | vs S&P 500 (Alpha) | Dividend Contribution |
|---|---|---|---|
| YTD | +13.3% | +4.0% | — |
| 1Y | +4.4% | -20.6% | +2.6% |
| 3YCAGR | +1.4% | -18.0% | +7.4% |
| 5YCAGR | +1.4% | -11.4% | +11.6% |
| 10YCAGR | +9.7% | -3.8% | — |
The S&P 500 is at 31.3x trailing P/E — Expensive relative to historical averages.
Quick answers to common questions about Air Products and Chemicals, Inc. (APD) valuation, health, and returns.
Air Products and Chemicals, Inc. is estimated to be overvalued under our discounted cash flow framework. relative multiples indicate the stock is Expensive versus peers compared to industry peers. overvalued (implying -29.9% downside from DCF intrinsic value of $196.40)
Air Products and Chemicals, Inc. has multiple valuation anchors: DCF Intrinsic Value: $196.40 | Peer Relative Fair Value: $186.83 | Wall Street Analyst Target: $325.63 (implying +16.2% upside). A convergence of these signals offers higher conviction.
Air Products and Chemicals, Inc. displays weak financial health with a composite quality score of 35/100, supported by a Altman Z-Score of 1.9 (grey zone), Piotroski F-Score of 2/9, Return on Invested Capital (ROIC) of -2.0%.
Air Products and Chemicals, Inc. pays a 2.5% dividend yield, covered by a 0% payout ratio with 43 years of growth, supplemented by a 0.0% buyback yield.
Air Products and Chemicals, Inc.'s current growth trajectory is Stable. The company achieved -0.5% 1Y revenue growth and -110.3% 1Y EPS growth, compared to its 3Y revenue CAGR of -1.8%.
Wall Street consensus is Buy based on 42 analysts, beating EPS expectations in 75% of recent quarters with a 4-quarter streak. The consensus price target represents a +16.2% change from current levels.
Investment risks for Air Products and Chemicals, Inc. include: -22.9% 1-year max drawdown. Volatility risk is characterized by a beta of 0.31x.
No. These computations are purely quantitative model outputs for informational purposes. They do not account for qualitative management shifts or macro events. Always consult a licensed RIA before buying or selling shares.
Disclaimer: This page is for informational purposes only and does not constitute financial advice. All valuation models, scores, and target estimates are automated computations under stated assumptions and should not be relied upon as the sole basis for any investment decision.