In a report released yesterday, John McNulty from BMO Capital maintained a Hold rating on Air Products and Chemicals (APD – Research Report), with a price target of $346.00.
John McNulty has given his Hold rating due to a combination of factors surrounding Air Products and Chemicals. The recent decision by the new CEO, Eduardo Menezes, to exit three projects, resulting in a significant write-down of up to $3.1 billion, highlights potential risks that still linger for the company. While Menezes’ swift actions are promising, the magnitude of the write-down indicates challenges that need to be addressed before a more optimistic outlook can be justified.
Additionally, although there are positive developments such as the progress on the NEOM green hydrogen project, which is 80% complete without additional cost overruns, there are still concerns about the company’s core pressures. The anticipated risks to the 2025 and possibly 2026 estimates suggest that while profitability improvements are expected under the new leadership, they may take longer than investors hope. As a result, McNulty believes the stock will likely remain stagnant until earnings expectations are adjusted and a more stable foundation is established.