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Praxair: Analysts See Limited Upside

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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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