One-glance verdict
Overvalued
$39.95 our estimate vs market $306.40
Wall Street consensus: $327.86 (720.7% higher than our fair-value estimate)
667% above our estimate, beyond the bull case
Fundamentals snapshot
Air Products and Chemicals, Inc.
APD · NYQ · Basic Materials · Specialty Chemicals
Current price
$306.40
52-week range
$229.11 - $307.96
Market cap
$68.23B
Balance sheet
Stretched
13.50x Strong cushion
Net debt $17.49B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Revenue grew 3.5% last year.
- Reward Returns 12.4% on equity, ahead of 16% of its peers.
- Risk Net debt grew 229.3% over 3 years.
- Risk Stock trades 42.9% above its 5-year average P/E.
What this company does
Air Products and Chemicals, Inc.
Air Products and Chemicals sells essential industrial gases like oxygen, nitrogen, and hydrogen to factories that make everything from steel to medical equipment and gasoline. The company primarily earns recurring revenue (income that is predictable and likely to continue in the future) by locking customers into long-term supply contracts. This business model is important because its customers need these gases continuously to operate their plants, providing a steady and reliable stream of cash for Air Products.
How the company got here
Air Products was founded in 1940 with a revolutionary idea for the time: building industrial gas generators right next to the large steel mills and factories that needed them. This "on-site" model cut out the high cost of transporting heavy gas cylinders, giving the company its first big break. During World War II, the company grew by making mobile oxygen generators for military aircraft. Over the decades, it expanded from just oxygen into a wide range of gases like nitrogen, hydrogen, and helium, and also entered the chemicals business through acquisitions. This dual focus on industrial gases and specialty chemicals, along with expansion into Europe and Asia, shaped it into the global company it is today.
What it actually does
Think of Air Products as a utility company, but instead of electricity or water, it supplies essential gases that other companies need to make their products. These aren't gases you'd buy at a store; they are fundamental ingredients for industries like oil refining, electronics manufacturing, steel production, and even food processing. For example, a food company might use nitrogen from Air Products to quickly freeze pizzas, or a refinery might use its hydrogen to make cleaner gasoline. The company produces these gases in several ways, from giant plants built next to a single customer to a fleet of trucks that deliver liquefied gases, similar to how a propane company delivers fuel.
Industrial Gases – Americas
This is the company's business in North and South America, its largest and most established market. It sells fundamental gases like oxygen, nitrogen, and hydrogen to a huge range of customers, from massive oil refineries along the U.S. Gulf Coast to food processors and hospitals. A big part of this business involves long-term contracts (often 15-20 years) to supply customers directly from on-site plants or through pipelines, which creates a very stable and predictable stream of revenue (money the company earns from sales). This segment is the foundation of the company's sales and profits.
Industrial Gases – Asia
This segment operates in fast-growing markets like China and Korea, supplying industrial gases to support the booming manufacturing and electronics industries there. For example, it provides ultra-pure specialty gases that are essential for making semiconductors (the chips in our phones and computers). The company often partners with local companies in joint ventures (a business arrangement where two or more parties agree to pool their resources for the purpose of accomplishing a specific task) to expand its reach in the region. This part of the business represents a major area of growth for Air Products.
Industrial Gases – Europe
Serving a mature industrial market, this segment supplies gases to a wide variety of customers across Europe, similar to its Americas business. It serves industries like chemical manufacturing, metals, and food and beverage. The company has grown its presence here over the years by acquiring smaller, regional gas suppliers to build a stronger network. This segment provides a steady, though often slower-growing, source of income for the company.
Industrial Gases – Middle East and India
This is a newer but rapidly expanding part of the company, focused on large-scale energy and industrial projects. For instance, Air Products is involved in massive projects to supply hydrogen and other gases to refineries and chemical plants in countries like Saudi Arabia. The company is also making big investments here in what's known as "green hydrogen," a clean energy source. This segment is home to some of the company's largest and most ambitious new investments.
Corporate and Other
This smaller segment is where the company houses its equipment sales business. Instead of just selling the gas, Air Products also designs and sells the specialized equipment used to produce, process, and transport industrial gases, such as air separation plants and containers for super-cold liquid helium. This allows other companies, sometimes even competitors, to use Air Products' technology in their own facilities. It's a much smaller piece of the overall business compared to gas sales.
What management is betting on now
Management is heavily focused on two main goals: growing its core industrial gas business and becoming a world leader in clean hydrogen. The company is investing billions in large-scale projects that produce "green" and "blue" hydrogen, which are forms of hydrogen made with renewable or low-carbon energy. The bet is that as the world tries to reduce carbon emissions, there will be huge demand for clean hydrogen to power things like trucks and heavy industry. At the same time, the company continues to invest in its traditional on-site gas supply business, which provides stable, long-term profits to fund these ambitious new energy projects.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$-345.20M
FY2024 Q4
$1.57B
FY2025 Q1
$-1.31B
FY2025 Q2
$-1.56B
FY2025 Q3
$-640.00M
FY2025 Q4
$1.74B
FY2026 Q1
$-350.50M
FY2026 Q2
$-3.90M
Revenue
$3.17B
Net income
$710.40M
Diluted EPS
3.19
Operating cash flow
$1.10B
Free cash flow
$-3.90M
Fetching…
Sources
Revenue
$3.10B
Net income
$678.20M
Diluted EPS
3.04
Operating cash flow
$900.70M
Free cash flow
$-350.50M
Fetching…
Sources
Revenue
$3.17B
Net income
$4.90M
Diluted EPS
0.03
Operating cash flow
$3.26B
Free cash flow
$1.74B
Fetching…
Sources
Revenue
$3.02B
Net income
$713.80M
Diluted EPS
3.20
Operating cash flow
$855.80M
Free cash flow
$-640.00M
Fetching…
Sources
Revenue
$2.92B
Net income
$-1.73B
Diluted EPS
-7.77
Operating cash flow
$328.10M
Free cash flow
$-1.56B
Fetching…
Sources
Revenue
$2.93B
Net income
$617.40M
Diluted EPS
2.77
Operating cash flow
$811.70M
Free cash flow
$-1.31B
Fetching…
Sources
Revenue
$3.19B
Net income
$1.95B
Diluted EPS
8.75
Operating cash flow
$3.65B
Free cash flow
$1.57B
Fetching…
Sources
Revenue
$2.99B
Net income
$696.60M
Diluted EPS
3.13
Operating cash flow
$1.26B
Free cash flow
$-345.20M
Fetching…
Sources
Is it cheap or expensive?
Fair value $39.95 vs current price $306.40
Wall Street consensus is the average analyst price target: $327.86 (720.7% higher than our fair-value estimate).
Our most-likely fair value is $39.95 a share — about 87.0% below today's price of $306.40, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Stretched
Net debt $17.5B. Interest coverage 13.5x.
Net debt
$17.49B
Interest coverage
13.50x
Air Products and Chemicals, Inc.'s profit covers its interest bill about 13.5 times over. which is stronger than most peers shown here and 1 peers sit below 1x, which is the danger zone where profit does not fully cover the interest bill.
Stretched
Worse cushion
Baseline
Better cushion
APD
BASELINE
Air Products and Chemicals, Inc.
Total debt $18.44B Interest coverage 13.50x This is the baseline the peer rows are being compared against.
Total debt $26.32B Interest coverage 19.94x +48% vs APD Carries about 1.5x more debt cushion than APD.
Total debt $15.54B Interest coverage 63.29x +369% vs APD Carries about 4.7x more debt cushion than APD.
Total debt $9.27B Interest coverage 9.45x -30% vs APD Carries about 1.4x less debt cushion than APD.
Total debt $7.74B Interest coverage 9.00x -33% vs APD Carries about 1.5x less debt cushion than APD.
What you should know
The case for and against APD
3 Rewards
2 Risks
Rewards
-
Revenue grew 3.5% last year.
-
Returns 12.4% on equity, ahead of 16% of its peers.
-
Free cash flow was positive in 7/10 years.
Risks
-
Net debt grew 229.3% over 3 years.
-
Stock trades 42.9% above its 5-year average P/E.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
32.25x
Forward P/E
21.54x
P/B
4.36x
P/S
5.47x
EV/EBITDA
22.75x
PEG ratio
2.18x
Profitability
How much profit each dollar creates
Gross margin
32.0%
Operating margin
23.6%
Net margin
16.9%
ROE
12.4%
ROA
3.6%
Health
Liquidity and balance-sheet strength
Debt / equity
1.02x
Current ratio
1.43x
Quick ratio
0.98x
Total debt
$18.44B
Total cash
$954.20M
Growth
How the business has been compounding
Revenue TTM
$12.46B
Revenue 5Y CAGR
3.9%
EPS TTM
9.50
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$6.12B
Free CF TTM
$-3.77B
FCF margin
-30.2%
Dividend
Shareholder payout
Yield
2.4%
Payout ratio
75.7%
Last ex-div date
2026-07-01