Praxair: Analysts See Limited Upside



Analysts’ consensus on Praxair

So far, the number of analysts tracking Praxair has remained constant in 2018. Currently, 20 analysts are tracking Praxair. Among the analysts, 65%  recommended a “buy,” 35% recommended a “hold,” and none of the analysts recommended a “sell.”

Analysts’ consensus for Praxair suggests a target price of $172.75, which implies a return potential of ~6.50% over the closing price as of June 6. Analysts are remaining cautious until the Linde AG merger is complete.

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Praxair reported strong first-quarter numbers. The company reported revenues of ~$3.0 billion—9.9% growth compared to the previous year. Praxair reported an adjusted EPS of $1.65, which implies 20.4% growth on a year-over-year basis. Praxair expects the second-quarter EPS to be $1.65–$1.72. The merger is expected to be completed in the second half of 2018. Analysts are recommending to either “buy” or “hold” the stock.

Broker recommendations

  • Citigroup has raised its target price for Praxair to $177, which implies a return potential of 9.0% over the closing price of $162.27 on June 6.
  • JPMorgan Chase (JPM) rated Praxair as “overweight.” However, JPMorgan Chase didn’t provide a new target price. Earlier, JPMorgan Chase recommended a target price of $172, which implies a return potential of 6.0% from the closing price on June 6.

Investors can hold Praxair indirectly by investing in the Vanguard Materials ETF (VAW). VAW has invested 4.9% of its portfolio in Praxair. The fund also provides exposure to DowDuPont (DWDP) and LyondellBasell (LYB) with weights of 16.7% and 4.2%, respectively.


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