Air Products and Chemicals, Inc. (APD) Stock Analysis — Fair Value, Risk & Moat Rating
NYQ · Basic Materials · Specialty Chemicals
Is Air Products and Chemicals, Inc. a safe investment right now?
Air Products and Chemicals, Inc.'s Altman Z-Score of 3.18 places it in the safe zone. Our DCF model estimates intrinsic value at $324.53, suggesting the stock may be undervalued by 9%. Moat rating: 2.4/5 stars.
Could Air Products and Chemicals, Inc. go bankrupt? Altman Z-Score analysis
Z-Score of 3.18 is above 3.0, indicating the company is financially healthy by this metric.
- Below 1.8 — Distress Zone (high bankruptcy risk)
- 1.8 to 3.0 — Gray Zone (elevated uncertainty)
- Above 3.0 — Safe Zone (financially healthy)
What drives APD's Z-Score?
| Component | Formula | Value | Weight | Contribution |
|---|---|---|---|---|
| A · Working Capital / Total Assets | WC / TA | 0.0552 | 1.2 | 0.07 |
| B · Retained Earnings / Total Assets | RE / TA | 0.4939 | 1.4 | 0.69 |
| C · EBIT / Total Assets | EBIT / TA | 0.063 | 3.3 | 0.21 |
| D · Market Cap / Total Liabilities | MCap / TL | 3.1549 | 0.6 | 1.89 |
| E · Revenue / Total Assets | Rev / TA | 0.3184 | 1.0 | 0.32 |
How has APD's financial health changed over time?
| Year | Z-Score | Zone |
|---|---|---|
| 2016 | 5.01 | Safe |
| 2017 | 4.81 | Safe |
| 2018 | 6.7 | Safe |
| 2019 | 6.77 | Safe |
| 2020 | 7.27 | Safe |
| 2021 | 4.87 | Safe |
| 2022 | 4.77 | Safe |
| 2023 | 4.56 | Safe |
| 2024 | 3.86 | Safe |
| 2025 | 3.18 | Safe |
Source: Calculated from APD's latest 10-K filing on SEC EDGAR.
What could Air Products and Chemicals, Inc. be worth? (High Uncertainty)
Fair value range: $324.53 — $324.53
Valuation Methods Used
| Method | Fair Value | Weight | Detail |
|---|---|---|---|
| Historical PE × Forward EPS | $324.53 | 50% | 23.0x avg PE (3 years) × $14.11 forward EPS |
| DCF (Discounted Cash Flow) | N/A | 30% | Two-stage DCF: $0.0B TTM FCF, 5.7% growth, 7.7% WACC |
Assumptions & Data Sources
| Parameter | Value | Source |
|---|---|---|
| FCF Growth Rate (Stage 1) | 5.7% | 70% analyst consensus + 30% historical |
| Analyst EPS Growth (This Year) | 8.5% | Consensus (21 analysts) |
| Analyst EPS Growth (Next Year) | 7.8% | Consensus |
| Historical 5Y FCF CAGR | 0% | SEC EDGAR |
| Terminal Growth Rate | 2.5% | Long-term GDP proxy |
| Discount Rate (WACC) | 7.7% | CAPM (Rf=4.3% + 0.81*5.5%) |
| Net Cash / (Debt) | $-17,160M | Balance sheet |
| Base FCF (TTM) | $0.0B | Trailing 12 months |
| Shares Outstanding | 222,656,008 | Latest |
Sensitivity Analysis
| Growth Rate | 8% WACC | 10% WACC | 7.7% WACC | 13% WACC |
|---|---|---|---|---|
| 0% | $0.00 | $0.00 | $0.00 | $0.00 |
| 2.5% | $0.00 | $0.00 | $0.00 | $0.00 |
| 5.0% | $0.00 | $0.00 | $0.00 | $0.00 |
| 7.5% | $0.00 | $0.00 | $0.00 | $0.00 |
Free Cash Flow History
| Year | FCF | Growth |
|---|
Source: FCF data from SEC EDGAR filings. Price via Yahoo Finance.
Does Air Products and Chemicals, Inc. have a durable competitive advantage?
Moat rating: 2.4/5.
What makes up APD's moat score?
ROIC Stability
ROIC variability over the past decade. Score: 3/5.
Gross Margin Trend
Gross margin trajectory over the past decade. Score: 3/5.
Switching Costs
Estimated customer lock-in based on margin level. Score: 1/5.
How stable is APD's return on invested capital?
| Year | ROIC | Trend |
|---|---|---|
| 2016 | 9.6% | — |
| 2017 | 8.8% | Stable |
| 2018 | 9.9% | Rising |
| 2019 | 8.6% | Declining |
| 2020 | 11.5% | Rising |
| 2021 | 9.4% | Declining |
| 2022 | 9.3% | Stable |
| 2023 | 9.6% | Stable |
| 2024 | 8.3% | Declining |
| 2025 | 7.0% | Declining |
Source: ROIC calculated from SEC EDGAR filings.
Is Air Products and Chemicals, Inc.'s dividend safe?
Can Air Products and Chemicals, Inc. afford its dividend?
Payout ratio is 101.0%. FCF covers the dividend 0.0x. 44 consecutive years of payments.
Air Products and Chemicals, Inc.'s key financial metrics
| Metric | Latest | 1Y Ago | 3Y Ago | Trend |
|---|---|---|---|---|
| Revenue | $12.6B | $12.7B | $8.9B | Rising |
| Net Income | $2.3B | $2.3B | $1.9B | Rising |
| Gross Margin | 7.3% | 7.9% | N/A | — |
Common questions about Air Products and Chemicals, Inc.
Is Air Products and Chemicals, Inc. at risk of going bankrupt?
Air Products and Chemicals, Inc.'s Altman Z-Score of 3.18 places it in the safe zone. This metric uses balance sheet ratios to predict bankruptcy probability within 2 years. A score below 1.8 signals distress, while above 3.0 indicates safety.
What is Air Products and Chemicals, Inc.'s intrinsic value based on DCF?
Our DCF model estimates Air Products and Chemicals, Inc.'s intrinsic value at $324.53 per share. The current margin of safety is 8.7%. This estimate is based on historical free cash flow trends and a risk-adjusted discount rate.
Does Air Products and Chemicals, Inc. have a competitive moat?
Air Products and Chemicals, Inc. receives a moat rating of 2.4 out of 5 stars, based on ROIC stability, gross margin trends, and estimated switching costs. A rating above 3.5 suggests a durable competitive advantage.
Is Air Products and Chemicals, Inc.'s dividend safe?
Our dividend safety analysis examines payout ratio, free cash flow coverage, and the company's streak of consecutive dividend payments to determine whether the current payout is sustainable.
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FairValueLabs Disclaimer
All valuations, scores, ratings, and classifications on this page are produced by the FairValueLabs internal valuation system. They do not represent actual market value, guaranteed outcomes, or professional investment advice. These are analytical estimates for educational and research purposes only.
This is not financial advice. All data is sourced from SEC EDGAR public filings. Always consult a qualified financial advisor before making investment decisions.
Last updated: Apr 20, 2026. Data sources: SEC EDGAR (financial statements), Yahoo Finance (market data, analyst consensus). Data may not reflect the most recent quarter.
APD analysis methodology: How we calculate fair value, Z-Scores, and moat ratings