Why Air Products And Chemicals (APD) Stock Is Gaining On Wednesday

NEW YORK (TheStreet) -- Shares of Air Products and Chemicals Inc. (APD) are higher by 6.72% to $129.77 in early trading this morning after the company announced it hired Rockwood Holdings Inc. (ROC) chairman and CEO Seifi Ghasemi to replace its retiring CEO John McGlade beginning July 1, Bloomberg reports.

Ghasemi joined Air Products' board in September and spent 13 years working at Rockwood Holdings, switching the company's main focus to lithium for batteries and specialty materials for cars and planes, selling Rockwood's clay additive and titanium-dioxide businesses for close to $4 billion, Bloomberg added.

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Separately, TheStreet Ratings team rates AIR PRODUCTS & CHEMICALS INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:

"We rate AIR PRODUCTS & CHEMICALS INC (APD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, good cash flow from operations, solid stock price performance and reasonable valuation levels. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Despite its growing revenue, the company underperformed as compared with the industry average of 11.2%. Since the same quarter one year prior, revenues slightly increased by 3.9%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • Net operating cash flow has increased to $478.50 million or 47.50% when compared to the same quarter last year. In addition, AIR PRODUCTS & CHEMICALS INC has also modestly surpassed the industry average cash flow growth rate of 38.34%.
  • AIR PRODUCTS & CHEMICALS INC' earnings per share from the most recent quarter came in slightly below the year earlier quarter. This company has reported somewhat volatile earnings recently. But, we feel it is poised for EPS growth in the coming year. During the past fiscal year, AIR PRODUCTS & CHEMICALS INC increased its bottom line by earning $4.73 versus $4.66 in the prior year. This year, the market expects an improvement in earnings ($5.73 versus $4.73).
  • Compared to its closing price of one year ago, APD's share price has jumped by 26.11%, exceeding the performance of the broader market during that same time frame. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • You can view the full analysis from the report here: APD Ratings Report
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