Value
4.5/10data confidence 83%| Component | Sub-score |
|---|---|
| P/S | 6.6 |
| EV/EBITDA | 0.6 |
| Fwd P/E | 6.1 |
| PEG | 4.3 |
| Analyst target | 5.0 |
- ▸Forward P/E: 21.3x
- ▸PEG: 2.21
APD · Why this verdict
Why Air Products and Chemicals (APD) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score4.5/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Air Products has a perfect four-quarter earnings-beat streak and strong momentum, but weak cash generation, heavy overseas concentration and a price that has essentially reached the analyst target leave little upside.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The $307.15 price is only 0.4% below the $308.30 analyst target, leaving a reward-to-risk of 0.03 against 13.0% downside to the stop. Upside pct | Analysts should lift targets meaningfully above the current price as earnings grow, restoring upside over 12 months. | →Stable |
| CounterA perfect beat streak and rising estimates could drive target upgrades, so the limited upside may be temporary. | ||
Momentum is strong at 7.1 out of 10, with the price above its 200-day average and rising volume accumulation, but RSI at 87 marks it as heavily overbought. Momentum breakdown | Momentum score should stay above 6.0 as the stock holds above its 200-day average. | ↓Deteriorating |
| CounterAn RSI of 87 is an extreme overbought reading that usually precedes a pullback. | ||
The company beat EPS estimates in all four of the last quarters, with an average surprise of 3.12%. Earnings track record | EPS should beat or meet estimates in each of the next four quarters. | →Stable |
| CounterThe beats are small (0.22% to 4.54%) and there were misses of -4.86% in May 2025 and -6.14% in February 2024. | ||
The business is burning cash, with free cash flow at -12% of revenue, no competitive moat and a quality score of 3.4 below the 4.0 floor. Quality breakdown | Free cash flow margin should turn positive and the quality score should rise above 4.0 over 12 months. | →Stable |
| CounterHeavy capital spending in industrial gases is often front-loaded and can reverse once projects start producing revenue. | ||
Revenue is concentrated geographically, with 60.0% coming from outside the United States and a concentration in regional industrial gases. Bear case | The mix should stay stable, with no single region disruption reducing results over the next 12 months. | →Stable |
| CounterRegional industrial gas contracts are long-term and sticky, so geographic concentration may carry less risk than the number suggests. | ||
The $307.15 price is only 0.4% below the $308.30 analyst target, leaving a reward-to-risk of 0.03 against 13.0% downside to the stop.
→StableUpside pct
- Expectation
- Analysts should lift targets meaningfully above the current price as earnings grow, restoring upside over 12 months.
CounterA perfect beat streak and rising estimates could drive target upgrades, so the limited upside may be temporary.
Momentum is strong at 7.1 out of 10, with the price above its 200-day average and rising volume accumulation, but RSI at 87 marks it as heavily overbought.
↓DeterioratingMomentum breakdown
- Expectation
- Momentum score should stay above 6.0 as the stock holds above its 200-day average.
CounterAn RSI of 87 is an extreme overbought reading that usually precedes a pullback.
The company beat EPS estimates in all four of the last quarters, with an average surprise of 3.12%.
→StableEarnings track record
- Expectation
- EPS should beat or meet estimates in each of the next four quarters.
CounterThe beats are small (0.22% to 4.54%) and there were misses of -4.86% in May 2025 and -6.14% in February 2024.
The business is burning cash, with free cash flow at -12% of revenue, no competitive moat and a quality score of 3.4 below the 4.0 floor.
→StableQuality breakdown
- Expectation
- Free cash flow margin should turn positive and the quality score should rise above 4.0 over 12 months.
CounterHeavy capital spending in industrial gases is often front-loaded and can reverse once projects start producing revenue.
Revenue is concentrated geographically, with 60.0% coming from outside the United States and a concentration in regional industrial gases.
→StableBear case
- Expectation
- The mix should stay stable, with no single region disruption reducing results over the next 12 months.
CounterRegional industrial gas contracts are long-term and sticky, so geographic concentration may carry less risk than the number suggests.
Per-dimension breakdown
Quality
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 0.0 |
| ROA | 3.2 |
| Gross margin | 2.4 |
| Op margin | 10.0 |
| Net margin | 0.0 |
| Current ratio | 4.3 |
| FCF quality | 0.0 |
| Moat | 3.8 |
| Piotroski F | 6.7 |
- ▸Cash-burning: FCF -12% of revenue
- ▸No competitive moat
Growth
3.7/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 3.7 |
Momentum
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.5 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 2.5 |
- ▸Overbought (RSI 90)
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| Price target | 6.7 |
| erm sentiment | 4.7 |
Insider
5.2/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.3 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
1.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.7 |
| quality rank | 2.6 |
| growth rank | 2.4 |
Technical
4.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.0 |
| support resistance | 0.7 |
| 52w position | 9.6 |
Risk (lower is worse)
7.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.9 |
| days to cover | 6.7 |
| volatility | 8.6 |
| put call | 10.0 |
| implied vol | 6.9 |
| max pain risk | 3.0 |
| beta | 8.4 |
| debt equity | 4.8 |
- ▸Above max pain $175
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 4.1 |
| dividend safety | 3.0 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 6 days
- ▸Yield trap warning: high yield but unsafe
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:5.2>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- ASYMMETRY:0.0<1.5@spot
- EARNINGS_PROXIMITY:6d<=7d
Warning (1)
- MOMENTUM:5.2<5.5 (soft — BUY_NOW allowed but watch)
Reward-to-Risk
0.03
Upside
+0.4%
Downside
13.0%
Sizing output
AVOID
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's 0.0<1.5@spot outcome against Risk (lower is worse) at 7.2 and asymmetric R:R of 0.03.
The strongest dimensions are Risk (lower is worse) at 7.2, Sentiment at 6.5, and Catalyst at 5.4; the weakest are Peer rank at 1.9, Quality at 3.4, and Growth at 3.7. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 0.03 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Price At Analyst Target
Trip ifAnalyst target rises above $340 from current $308.30.
- P2Perfect Earnings Beat Streak
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P3Cash Burning No Moat
Trip ifFree cash flow margin rises above 0% from current -12% of revenue.
- P4Overseas Concentration Risk
Trip ifRevenue share from outside the United States falls below 40% from current 60%.
- P5Strong Overbought Momentum
Trip ifMomentum score falls below 5.0 from current 7.1.