Air Products Raises Mantle Ridge Stake, Wall Street Upgrades Investing.com

Investing.com — Shares of Air Products (NYSE: ) & Chemicals rose more than 7% on Monday following reports that activist investor Mantle Ridge has built a more than $1 billion stake in the company, with plans to to promote strategic changes.

According to The Wall Street Journal, Mantle Ridge, led by Paul Hilal, plans to focus on succession planning for longtime CEO Seifi Ghasemi and improving the company’s capital allocation and strategy.

Mantle Ridge apparently believes Air Products is trading at a discount to its peers despite its strong position in the industrial gas and clean hydrogen sectors.

Wall Street analysts responded positively to the news. Evercore ISI upgraded the stock to Outperform, raising its price target from $305 to $365.

“The FY25 bridge looks safer than expected. Activist is nice to have and what we expected,” the firm said, noting that Mantle Ridge’s involvement could drive better capital allocation and risk management.

Citi also weighed in, noting that activist momentum could unlock shareholder value, especially as Air Products’ underperformance compared to peers Linde (NYSE: ) and Air Liquide (OTC: ) is not fully explained by market conditions.

Citi raised its price target on APD to $345 and placed a 90-day positive catalyst monitor on the stock, suggesting that further clarity on CEO succession and disclosures on project pipelines could boost investor sentiment.

Jefferies echoed that optimism, upgrading Air Products to Buy from Hold and raising its price target to $364. The firm believes the company could return to its core industrial gas business, moving away from more speculative energy transition projects.

“In our view, an activist stake would give Air Products the opportunity to reset its narrative to ‘quality growth’ and, at least for a while, tie shareholder returns to company initiatives rather than policy changes and the prospects for emergence into exploitation in commodity spreads,” Jefferies wrote.