Analyst Note| Krzysztof Smalec, CFA |
Narrow-moat rated Air Products reported mixed fiscal third-quarter results, as its sales of $2,605 million beat the FactSet consensus estimate of $2,498 million, but adjusted EPS of $2.31 fell $0.05 short of expectations. The industrial gas firm also lowered the top end of its full-year fiscal 2021 adjusted EPS guidance range by a nickel, from $8.95-$9.10 to $8.95-$9.05. We’ve trimmed our fair value estimate for Air Products to $316 from $323, which reflects our slightly more muted near-term projections and the implementation of a probability-weighted change in the U.S. statutory tax rate in our model. We see shares as modestly undervalued at current levels, with the stock trading in 4-star territory.