Air Products & Chemicals (APD.N): Dimming Noise on NEOM; Shifting Focus Toward Traditional IG Backlog

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Air Products & Chemicals (APD.N): Dimming Noise on NEOM; Shifting Focus Toward Traditional IG Backlog

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30 Jul 2026 16:00:00 ET │ 13 pages

Air Products & Chemicals (APD.N)

Dimming Noise on NEOM; Shifting Focus Toward Traditional IG Backlog

CITI'S TAKE

Neutral Our takeaways: 1) APD reiterated that NEOM won't have any financial

impact in FY2027, given the long ramp time to full-rates. Despite the Price (29 Jul 26 16:00) US$294.27

uncertainty on LT green ammonia demand outlook, APD expects relatively Target price US$330.00↑

stable JV income given the fixed price/cost exposure. That said, APD has from US$315.00

noted the $5.2bn NGHC net debt adjustment figures, which would Expected share price return 12.1%

meaningfully lower leverage ratio to 2.1x from current 3.1x. 2) APD's Expected dividend yield 2.5%

traditional IG backlog grew meaningfully in the past 6m, demonstrating its

Expected total return 14.6% focus on traditional IG business. While current IG backlog overweight

Market Cap US$65,528M electronics, APD remains active on space opportunity, and believes it

remains well suited, given its experience with operations at scale. 3)

Capex outlook lowered by $500mm to reflect the lower overall

maintenance cost, customers deferring maintenance, along with some Patrick CunninghamAC

project cancellation shedding out of Darrow. 4) On Darrow, APD notes +1-212-816-6684

selling as whole would provide the most value, resulting in uncertainty on patrick.cunningham@citi.com

timeline.

Stock Action — Our F4Q26 EPS estimate moves higher by ~11c nearing the top-end

of guidance range ($3.55-$3.65) as we incorporate modestly higher margins in Asia

and Europe on improved price/cost. Our FY26 EPS also moves higher by ~25c, given

the strong F3Q results and improved outlook.