Air Products and Chemicals (APD): Exploring Valuation After Upbeat Q3 2025 Earnings and New Guidance

Air Products and Chemicals (APD) just posted its Q3 2025 earnings, surpassing expectations and updating its full-year guidance. Investors are paying close attention, especially as the CEO stressed a continued focus on cost control and hydrogen investments.

See our latest analysis for Air Products and Chemicals.

Air Products and Chemicals has seen its share price slide recently, dropping 2.1% over the last day and tumbling 10.6% in the past month, even as fresh earnings and continued hydrogen investments keep the company in the spotlight. While the 1-year total shareholder return stands at -16.8%, the longer-term 3-year total return of 19.2% suggests that momentum has faded this year. The bigger story may still hinge on how its clean energy vision plays out.

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With shares down sharply this year despite upbeat earnings and future-focused hydrogen projects, investors may be wondering if Air Products and Chemicals is now trading at a bargain or if the market has already factored in all the growth ahead.

Most Popular Narrative: 20.7% Undervalued

With Air Products and Chemicals closing at $257.08, the most popular narrative places fair value near $324.14, suggesting the current price might be missing something big. Investors are watching closely as analyst models imply significant upside and a shifting outlook on future earnings power.

Heavy investments in large-scale hydrogen, blue/green ammonia, and carbon capture projects—supported by multi-decade power and supply agreements in growth regions (such as the Middle East, Asia, and the U.S. Gulf Coast)—are set to come online over the next several years. These projects are expected to provide robust and stable earnings and support a trajectory of consistently higher operating margins.

Read the complete narrative.

Want to see what’s driving these bold projections? The secret ingredients in this narrative hint at the kind of growth and profit leaps rarely seen in industrials. Find out which future milestones and financial moves make up the backbone of this compelling valuation.

Result: Fair Value of $324.14 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, ongoing project delays or increased competition in clean hydrogen could put pressure on Air Products and Chemicals’ margins and challenge the growth story.

Find out about the key risks to this Air Products and Chemicals narrative.

Another View: Price Ratios Paint a Different Picture

While fair value estimates point to Air Products and Chemicals being undervalued, traditional price-to-earnings comparisons add a dose of caution. The company trades at 36.4 times earnings, which is higher than its peer average of 32.2 and the broader U.S. Chemicals industry at 25.7. The market’s fair ratio for APD sits at 36, so there is limited room for error if expectations fall short. Could this premium signal optimism, or does it raise the risk that shares are priced for near-perfection?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Air Products and Chemicals Narrative

If you have your own take on the numbers or want to dig even deeper, it’s easy to uncover your narrative and shape your own forecast in just minutes. Do it your way

A great starting point for your Air Products and Chemicals research is our analysis highlighting 3 key rewards and 4 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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