Analyst raises expectations for Air Products

27 March 2006 16:59  [Source: ICIS news]

HOUSTON (ICIS news)--Deutsche Bank on Monday said it was raising its price target for Air Products by $3 to $75 (Euro62) and reiterated its buy rating, citing increased productivity and returns.

“With chemicals resolved, productivity increasing, base gases performing at a high level and returns on capital increasing, we expect Air Products 10% valuation discount to Praxair [a pure competitor following the chemicals restructuring] to close quickly,” said David Begelieter, an analyst with Deutsche Bank.

Deutsch Bank said Air Products trades at 19.0 times its 2006 estimated earnings per share (EPS) and must narrow the gap between itself and Praxair, which trades at 20.3 times, over the next 12 months.

“Risks include rising interest rates, slowing demand, competition in refinery hydrogen, softness in the market for electronics gases and weaker economic trends in Europe,” said Deutsche Bank.

Allentown, Pennsylvania-based Air Products provides atmospheric gases, process and specialty gases, performance materials and chemical intermediates.

By: Joseph Lohan
+1 713 525 2653

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