Quick Take: Air Products cancels Darrow & 3QFY26 update

Research evidence excerpt

Quick Take: Air Products cancels Darrow & 3QFY26 update

30 June 2026

James Hooper

+44 20 7676 6995

European Chemicals james.hooper@bernsteinsg.com

Air Products & Chemicals Inc Sebastien Afoy

+44 207 762 1032

Rating sebastien.afoy@bernsteinsg.com

Outperform Specialist Sales

Price Target James Brady

+44 20 7762 5272

APD 344.00 USD james.brady@bernsteinsg.com

Steve Song

+1 917 344 8401

steve.song@bernsteinsg.com

We see yet more evidence of Air Products’ new disciplined culture. Air Products’ decision

Close Date 29 Jun 2026

to cancel their Louisiana Clean Energy Complex (LCEC) project with Yara at Darrow, as

APD Close Price (USD) 271.35

well as other smaller energy transition projects, shows the renewed commitment to returns

Price Target (USD) 344.00

after construction costs increased. Our update call on with IR on 3QFY26 was therefore

Upside/(Downside) 27%

conveniently timed, and here we continue to see upside to consensus for 3Q and FY26.

52-Week Range 307.96/229.11

The project’s expected financial returns have not met either partners’ investment SPX 7,440.43

criteria. Construction costs were the key pinch point versus December’s announced FYE Sep

framework. APD will also discontinue Arizona liquid hydrogen and other smaller scale Div Yield 2.7%

projects supporting hydrogen for mobility, where economics are also challenged. These Market Cap (USD) (M) 60,424

cancellations will incur a $2.9bn pre-tax write-down for Air Products as part of 3QFY26 EV (USD) (M) 80,331

reporting. Cash costs are still to be determined, and we expect these to be far less than Performance YTD 1M 6M 12M

the write-down. Some equipment could potentially be used elsewhere or sold and the land Absolute (%) 9.8 (2.6) 9.8 (3.8)

at Darrow would also appear to a logical data centre site.