Air Products (APD)
Materials · $69.3B market cap · SEC CIK 0000002969
ahead of 12% of the S&P 500 · #20 of 26 in Materials
Next reports on Jan 28, 2027, with analysts expecting $3.47 in earnings per share.
52-week range $229.11 to $324.00. 4% below its 52-week high and 36% above its low.
The case for APD
- Moves less than the market (beta 0.67).
The case against
- Expensive for its growth: 130.2× earnings, where 0% a year of growth would justify about 8×.
- Burned $3.8B of free cash in FY2025.
- Return on equity of only 4%.
- Growth is weak (29/100): revenue +7.9%, +4.7% a year over five years.
- Price/sales of 5.3× is higher than 96% of Materials companies.
- Free-cash-flow yield of −5.4% is lower than 92% of Materials companies.
What the score is made of
Each factor is half a curve over reported figures and half a rank among the other Materials companies (momentum is judged against fixed thresholds only), and the five are blended by weight. The score is where that blend places it in the S&P 500. It describes the last filing and the current price. It is not a forecast.
| Valuewhat you pay for the earnings and cash, against the growth you get | 10 |
|---|---|
| Growthhow fast revenue and earnings are moving, this year and over five | 29 |
| Profitabilityhow much of the revenue becomes profit, and how much of that is cash | 26 |
| Momentumhow the price has behaved lately | 69 |
| Stabilityhow violently it moves, what it owes and what it pays you | 85 |
- Its dividend figures disagree with each other (a 2.6% yield against about 0.5% implied by its payout ratio and P/E), so the dividend is not counted.
- Its profits follow commodity prices, so last year's change in earnings per share is not counted as growth.
- Each factor except momentum is half fixed thresholds, half rank among the 26 Materials companies.
The financials
Revenue growth
Is the business growing? Slowly
| Last 12 months | +7.9% |
|---|---|
| Over 5 years | +4.7% a year |
| FY2025 revenue | $12.0B (−1%) |
Free cash flow
Is it generating real cash? No, it is burning cash
| FY2025 free cash flow | −$3.8B |
|---|---|
| Of revenue | −31% |
| Of profit | n/a |
Profit margins
Is profitability improving? No, slipping
| Gross margin | 32% |
|---|---|
| Operating margin | 0% |
| Net margin, FY24 → FY25 → now | 31.6% → −3.3% → 4.1% |
Debt vs. cash
Is the balance sheet healthy? Mostly, with some debt to carry
| Cash | $1.9B |
|---|---|
| Long-term debt | n/a |
| Net cash | n/a |
| Years to repay | n/a |
| Debt / equity | 1.24× |
Valuation
Is the stock price reasonable? No, expensive
| P/E | 130.2× |
|---|---|
| Fair P/E for its growth | 8× |
| P/FCF | no free cash flow |
| Forward P/E | 22.0× |
| EV / EBITDA | 55.5× |
At 130.2× earnings it trades well above the 8× that 0% a year of growth would justify. Its free cash flow is negative, which counts against it.
The financials, five years deep
Pulled from Air Products's XBRL filings on SEC EDGAR. Italic rows are worked out from the others.
| FY2025 | FY2024 | FY2023 | FY2022 | FY2021 | |
|---|---|---|---|---|---|
| Revenue growth | |||||
| Revenue | $12.0B | $12.1B | $12.6B | $12.7B | $10.3B |
| Change on the year | −1% | −4% | −1% | +23% | — |
| Free cash flow | |||||
| Free cash flow | −$3.8B | −$3.1B | −$1.4B | $244M | $871M |
| Of revenue | −31% | −26% | −11% | 2% | 8% |
| Profit margins | |||||
| Operating margin | −7.3% | 36.9% | 19.8% | 18.4% | 22.1% |
| Net margin | −3.3% | 31.6% | 18.3% | 17.8% | 20.3% |
| Debt vs. cash | |||||
| Cash | $1.9B | $3.0B | $1.6B | $2.7B | $4.5B |
| Long-term debt | — | — | — | $6.4B | $6.9B |
| Net cash (debt) | — | — | — | −$3.7B | −$2.4B |
What Air Products says it does
As used in this report, unless the context indicates otherwise, the terms “we,” “our,” “us,” the “Company,” "Air Products," or “registrant” include our controlled subsidiaries and affiliates. Additional information about Air Products is available on our website at www.airproducts.com. References to our website within this report are inactive textual references only. The content of our website is not incorporated by reference into, and does not form part of, this Annual Report on Form 10-K. Air Products trades on the New York Stock Exchange under the symbol "APD". All periodic and current reports, registration statements, proxy statements, and other filings that we are required to file with the Securities and Exchange Commission ("SEC"), including our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities…
Risk factors APD lists in its 10-K
- In evaluating investment in the Company and the forward-looking information contained in this Annual Report on Form 10-K or presented elsewhere from time to time, readers should carefully consider the risk factors discussed below
- Unfavorable conditions in the global economy or regional economies, the markets we serve, or financial markets may decrease the demand for our goods and services and adversely impact our revenues, operating results, and cash flows
- Weak economic conditions and changing supply and demand balances in the markets we serve have negatively impacted demand for our products and services in the past and may do so in the future
- Demand for our solutions could be negatively impacted if the public and private sectors reduce their focus on reducing carbon emissions
- Excess capacity in our manufacturing facilities or those of our competitors could decrease our ability to maintain pricing and generate profits
- In addition, our operating results in one or more segments have in the past, and may in the future, be affected by uncertain or deteriorating economic conditions for particular customer markets within a segment
- 12 Table of Contents Our extensive international operations can be adversely impacted by operational, economic, political, security, legal, and currency translation risks that could decrease profitability
- In addition, our properties and contracts in these locations may be subject to seizure and cancellation, respectively, without full compensation for loss
- Successful operation of particular facilities or execution of projects may be disrupted by civil unrest, acts of war, sabotage or terrorism, and other local security concerns
- Such concerns may require us to incur greater costs for security or require us to shut down operations for a period of time