APD: Darrow Project Canceled, Potential Yara Agreement for NEOM Pending - Bull Thesis is Alive!

Research evidence excerpt

APD: Darrow Project Canceled, Potential Yara Agreement for NEOM Pending - Bull Thesis is Alive!

Chemicals

FLASH

FLASH: AIR PRODUCTS AND CHEMICALS, INC. June 30, 2026

(APD)

APD: Darrow Project Canceled, Potential Yara Agreement Rating:

for NEOM Pending - Bull Thesis is Alive! Outperform

Price:

In a PR on 6/30, APD officially canceled the Darrow blue H2/NH3 project, ending $271.35

a ~5-yr saga of investor fears re: potential cost overruns, project delays and off- Price Target:

$330take agreements. Consistent w/ our remarkson 6/15 - we sense the structure of the % Upside:

contracts (not the headline cost) was the deciding factor for the BoD, w/ risks for 21.6%

further overruns not adequately ring-fenced. It's our strong belief CEO Menezes was

Source: FactSet, Wolfe Research

targeting a mid-teens% ROIC, a bit above the minimum target return. Priced as of 06/29/26

The company is also exiting several other (small-scale) blue/green H2 projects, citing

challenging commercial conditions re: H2 for mobility. APD will take up to a ~$2.9bln

write-down (~$2.2bln post-tax) in F3Q (WRe ~$2.5bln attributable to Darrow), but

work to redeploy certain assets to other existing or future projects to offset the

exposure to existing contracts. It's our belief that APD will re-purpose up to ~50% of Chris Parkinson

the Darrow write-down amount to other baseline IG projects in its backlog, as well cparkinson@wolferesearch.com

as pieces on long lead time equipment for NH3 loops (perhaps even to Yara). 646-582-9365 View Chris’s Research

APD and Yara (world's largest transporter of NH3) are finalizing a marketing View APD Model

View Comp Tableagreement for green NH3 tonnes via NEOM, which is cited within the PR as being un-

associated w/ Darrow. Andrew Orme

aorme@wolferesearch.com