Atlantic Equities says that Air Products and Chemicals’ strong pricing power is a reason to buy, even though the shares fell more than 22% in this year’s environment. Colin Isaac, an analyst for the company’s industrial gas business, upgraded it to overweight. In a note to clients, Isaac stated that Air Products has proven pricing power and is well-insulated against inflation. Isaac stated that industrial gases stocks offer relatively strong growth, and industry pricing power means extreme inflationary pressures can be quickly recovered. High energy prices can be a secular tailwind for APD. They boost refining margins and short-term investment in traditional energy infrastructure, such as e.g. It also lends support to other energy projects and decarbonization. Isaac cited the $15 billion backlog of projects in blue, green, and gasification as reasons to like the stock. This could allow for 50% growth in earnings per share through 2027. Also, the firm raised its target price for the stock from $290 per share to $290 per share. This implies that there could be a 22.5% increase in shares compared with Tuesday’s closing price. Isaac indicated that there is potential for shares to rebound from recent losses if earnings momentum picks up and if the backlog of project work improves. — CNBC’s Michael Bloom contributed reporting
