APD
Air Products and Chemicals, Inc.
$289.47
Stable Earnings Power
40%
P/Adj-EPS × Normalized Multiple
Strong
·
Conviction
Overvalued
Trading 43.7% above fair value
You pay
$289.47
Bear
$161.11
Fair
$201.39
Bull
$241.67
Bear
$161.11
-44.3%
$10.08 × 12x P/E
Fair
$201.39
-30.4%
$10.08 × 15x P/E
Bull
$241.67
-16.5%
$10.08 × 18x P/E
Key Value Driver
Normalized P/E multiple (15x base case)
Implied Market Multiple
28.7x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $318.50 from 42 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $201.39 per share.
Warnings
Wall Street's average price target is $318.50 (from 42 analysts). Our estimate is 53% below the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples