Praxair Inc

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PX : NYSE : Basic Materials
$122.25 up 0.43 | 0.35%
Today's Range: 121.90 - 122.77
Avg. Daily Volume: 1,223,900
08/29/16 - 4:00 PM ET

Financial Analysis


PRAXAIR INC's gross profit margin for the second quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. Even though sales decreased, the net income has increased. PRAXAIR INC has weak liquidity. Currently, the Quick Ratio is 0.94 which shows a lack of ability to cover short-term cash needs. The company's liquidity has increased from the same period last year, indicating improving cash flow.

At the same time, stockholders' equity ("net worth") has remained virtually unchanged only increasing by 3.54% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY16 Q2 FY15
Net Sales ($mil)2665.02738.0
EBITDA ($mil)865.0902.0
EBIT ($mil)584.0624.0
Net Income ($mil)399.0308.0


Balance Sheet Q2 FY16 Q2 FY15
Cash & Equiv. ($mil)567.0136.0
Total Assets ($mil)19811.019067.0
Total Debt ($mil)9956.09347.0
Equity ($mil)5140.04964.0


Profitability Q2 FY16 Q2 FY15
Gross Profit Margin44.9244.63
EBITDA Margin32.4532.94
Operating Margin21.9122.79
Sales Turnover0.530.61
Return on Assets7.967.88
Return on Equity30.730.27
Debt Q2 FY16 Q2 FY15
Current Ratio1.331.26
Debt/Capital0.660.65
Interest Expense52.049.0
Interest Coverage11.2312.73


Share Data Q2 FY16 Q2 FY15
Shares outstanding (mil)285.23286.47
Div / share0.750.72
EPS1.391.06
Book value / share18.0217.33
Institutional Own % n/a n/a
Avg Daily Volume1219113.01213321.0

Valuation


HOLD. This stock's P/E ratio indicates a discount compared to an average of 25.17 for the Chemicals industry and a discount compared to the S&P 500 average of 25.13. Conducting a second comparison, its price-to-book ratio of 6.83 indicates a significant premium versus the S&P 500 average of 2.82 and a premium versus the industry average of 5.83. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
PX 22.37 Peers 25.17   PX 12.83 Peers 15.92

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

PX is trading at a discount to its peers.

 

Discount. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

PX is trading at a discount to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
PX 20.34 Peers 21.01   PX 7.48 Peers 1.78

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

PX is trading at a valuation on par with its peers.

 

Premium. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

PX trades at a significant premium to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
PX 6.83 Peers 5.83   PX 7.00 Peers 89.08

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

PX is trading at a premium to its peers.

 

Lower. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

However, PX is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
PX 3.36 Peers 2.34   PX -10.10 Peers -7.38

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

PX is trading at a significant premium to its industry.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

PX significantly trails its peers on the basis of sales growth

 

 

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