JPMorgan has upgraded Air Products and Chemicals to an Overweight rating, arguing the industrial gas supplier is better positioned than many peers to withstand a backdrop of slower growth, higher inflation and rising interest rates. The brokerage highlighted the predictability of the company's earnings as a key differentiator.
Analysts at the bank noted that Air Products has faced pressure in recent results from lower helium prices and excess supply. However, JPMorgan said helium prices are now moving higher after disruptions tied to the closure of the Strait of Hormuz and attacks on Qatar's Ras Laffan energy complex, a significant global supply hub. The bank expects that trend to reduce the negative earnings impact from helium in fiscal 2026 and to support a recovery in profitability.
On the specific earnings effect, JPMorgan now estimates the EBITDA drag from helium to be about $120 million in fiscal 2026, an improvement versus the company’s earlier estimate of about $150 million. The brokerage also flagged that firmer oil prices should lift demand across chemicals and refining - activities that together account for roughly 40% to 50% of Air Products’ revenue - and that could translate into stronger volumes in North America.
JPMorgan emphasized aspects of Air Products’ business that provide some protection against cost volatility. Roughly half of the company’s sales are governed by long-term on-site contracts that pass through raw material costs, offering partial insulation from input-price pressures.
For fiscal 2026, the bank projects earnings per share of $13.05, about an 8.5% increase from the prior year. It also described the company's balance sheet as solid, with estimated net debt to EBITDA of about 2.3x when excluding the NEOM project. JPMorgan set a $310 price target on the shares and noted that the stock currently trades at a wider discount to industry leader Linde plc than its historical range, which the bank said could leave room for multiple expansion if earnings stabilize.
Analysis context
The upgrade reflects JPMorgan’s view that improving helium pricing and steady contractual revenue streams reduce downside risk to near-term earnings and improve the case for relative outperformance in a tougher macroeconomic environment.