APD Not Moving Ahead with Darrow Project

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APD Not Moving Ahead with Darrow Project

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Air Products

APD Not Moving Ahead with Darrow

Project

Maintain Rating: NEUTRAL | PO: 305.00 USD | Price: 294.15 USD

Darrow decision improves investor sentiment 30 June 2026

This morning Air Products announced it would not go forward with its Darrow Louisiana Equity

hydrogen/ammonia project. While APD’s messaging has consistently set expectations of

cancellation, investors had increasingly feared they would move to an FID as mgmt had Matthew DeYoe, CFA Research Analyst

flagged constructive progress on the EPC bids (hence the positive reaction in shares BofAS

today). With shares underperforming Buy-rated Linde by ~10% over the past 2 months, +1matthew.deyoe@bofa.com646 855 5746

the reversal is not surprising. The project has been a headwind to investor sentiment as Hakim Sanfo

the large price tag ($8-9bn) was seen as a cash overhang, particularly given outstanding Research Analyst

BofAS

risks around inflation and progress payment schedule with Yara. We are a bit more +1 646 743 1557

mixed, as we would have liked APD to put a core industrial project (such as Darrow) in its hakim.sanfo@bofa.com

backlog, assuming it could button up the risk profile. Clearly that latter point proved too

difficult. With Darrow off the table, we expect focus to shift to earnings, where we/

investors expect a beat and guidance raise. We remain Neutral-rated on valuation. Stock Data

Price 294.15 USDCash charges could be offset by project sell down

As part of the announcement, APD will record pre-tax charges not expected to exceed Price Objective 305.00 USD

$2,900mn (~$2,200mn after tax) in F3Q, of this, cash expenditures are estimated not to Date Established 1-May-2026

exceed $925mn.