Air Products and Chemicals, Inc. (APD) Stock Valuation — PE Analysis
Chemicals - Specialty · NYSE
Current Price
$281.62
PE Ratio (TTM)
29.8x
Intrinsic Value
$288.22
+2.3% margin of safety
COMPETITIVE MOAT
↑Global Industrial Gas Leader
APD's extensive global network of production facilities and distribution infrastructure creates significant barriers to entry for competitors. This scale allows for cost efficiencies and reliable supply to diverse industrial customers.
↑Long-Term Customer Contracts
The company secures its revenue through long-term, take-or-pay contracts for industrial gases. These agreements lock in customers and provide predictable cash flows, insulating APD from short-term market volatility.
↑Technology and Innovation
APD invests heavily in proprietary technologies, particularly in areas like membrane separation for biogas and hydrogen production. This innovation drives demand in growing sectors like renewable energy and advanced materials.
INVESTMENT RISKS
↓Capital Intensity and Project Delays
Large-scale industrial gas projects require substantial capital investment and are susceptible to construction delays and cost overruns. This can impact profitability and return on investment.
↓Geopolitical and Supply Chain Disruptions
Global operations expose APD to geopolitical risks, such as those related to the Hormuz Strait, and potential supply chain disruptions. These can affect raw material costs and product delivery.
↓Economic Sensitivity and Demand Fluctuations
Demand for industrial gases is tied to broader economic activity. A slowdown in key end-use markets or destocking activities can negatively impact APD's sales volumes and pricing power.
Base case
APD base case PE valuation
A base case PE valuation for APD estimates a fair value of about $288.22 per share, against a current price of $281.62. The model assumes 6.8% annual earnings growth, a 30x target PE multiple, and a 10% discount rate.
Intrinsic Value
$288.22
Margin of safety
+2.3%
Expected annual return
+0.5%
Base case assumptions: 6.8% annual earnings growth, 30x target PE, 10% discount rate, 5 year projection. Data as of 2026-06-12.
This base case uses default assumptions and is not financial advice. The fair value changes significantly when the target PE or earnings growth rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the APD PE valuation
Adjust the target PE, earnings growth, and discount rate to see how the fair value and margin of safety for Air Products and Chemicals, Inc. respond.
Open PE Calculator for APDCompany Overview
Operating globally, Air Products and Chemicals, Inc. (APD) is a prominent supplier of industrial gases, specialized equipment, and associated services. The company's diverse product range includes atmospheric gases such as oxygen, nitrogen, and argon, as well as various process gases like hydrogen, helium, carbon dioxide, carbon monoxide, and syngas. They also provide a selection of specialty gases. APD is involved in the fabrication of crucial machinery for gas production and handling, including air separation units and non-cryogenic generators. These products and services cater to a broad spectrum of industries, including but not limited to refining, chemical processing, gasification, metals production, general manufacturing, food and beverage, electronics, medical imaging, and energy generation. Moreover, the company's capabilities extend to designing and manufacturing advanced systems for air separation, hydrocarbon recovery and purification, the liquefaction of natural gas, and the secure transportation and storage of liquid helium and hydrogen. APD also engages in a strategic partnership with Baker Hughes Company to further innovate hydrogen compression systems. The firm was established in 1940 and is based in Allentown, Pennsylvania.
Financial Metrics — APD PE Stock Valuation Data
PE Ratio (TTM)
29.8x
PEG Ratio
n/m
Earnings Yield
3.36%
ROE (TTM)
13.7%
Revenue/Share (TTM)
$55.94
Dividend Yield
2.55%
Debt/Equity
1.17x
Frequently Asked Questions
What is the PE ratio of APD?
The trailing twelve-month PE ratio of APD reflects how much investors pay per dollar of Air Products and Chemicals, Inc.'s earnings. This metric is most useful when compared to Chemicals - Specialty peers and the company's own historical range.
Is APD overvalued based on PE ratio?
APD's PE of 29.8x combined with a PEG ratio of -0.09 provides a growth-adjusted perspective. APD has negative earnings, so its PE and PEG ratios are not meaningful here and cannot tell you whether the stock is over or undervalued. Keep in mind that PE-based valuation works best for profitable, mature companies — for high-growth or cyclical Chemicals - Specialty, a DCF analysis may be more appropriate.
How do I value APD stock using PE ratio?
To value Air Products and Chemicals, Inc. using PE: (1) Compare the current PE (29.8x) against the Chemicals - Specialty median to assess relative pricing, (2) check the PEG ratio (-0.09) to adjust for growth expectations, (3) review the 5-year PE range to identify where the stock sits historically, and (4) estimate fair value by multiplying a target PE by forward EPS estimates. This relative approach complements DCF's absolute valuation.
What is the PEG ratio of APD?
APD's PEG ratio is -0.09, calculated by dividing the PE ratio (29.8x) by the expected earnings growth rate. Because APD has negative earnings, its PEG ratio is not meaningful and should not be read as a sign of under or overvaluation. Note that PEG accuracy depends on the reliability of growth estimates.
Should I use PE ratio or DCF for APD stock valuation?
PE ratio gives a quick relative read — how APD is priced versus Chemicals - Specialty peers. DCF provides an absolute value based on projected free cash flows. For the most reliable valuation, use PE as a quick comparability screen and DCF for a deeper fundamental analysis. Each method has blind spots: PE ignores capital structure and cash flow quality, while DCF is sensitive to growth and discount rate assumptions.
Learn More
- See APD DCF Valuation → — Intrinsic value via Discounted Cash Flow analysis
- PE Methodology — Step-by-step guide to PE ratio stock valuation
- DCF Methodology — Guide to discounted cash flow analysis
- PE Ratio — Understanding the price-to-earnings ratio
- Intrinsic Value — How to evaluate stock fair value
Related PE Valuations
All Basic Materials valuationsP/E and DCF value APD with different methods and assumptions, so the two conclusions can differ. Compare the DCF intrinsic value.
Price as of 2026-06-12. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.