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APD to Increase Supply for Samsung Electronics

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Air Products and Chemicals and Samsung Electronics

On September 10, Air Products and Chemicals (APD) announced that Samsung Electronics awarded the company with a contract to supply additional gaseous nitrogen and hydrogen to its plant in Giheung, South Korea. Air Products and Chemicals has been supplying gases to Samsung Electronic’s Giheung site since 1998. The additional order will help Air Products and Chemicals increase its strength in the region. However, Air Products and Chemicals didn’t disclose any of the deal’s financial aspects.

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To meet the increased demand, Air Products and Chemicals will build a new air separation unit, multiple hydrogen plants, and pipelines. The company expects the plant to be operational by 2020. Kyo-Yung Kim, the president of Air Products, Korea, said, “We are proud to expand our longstanding relationship with Samsung Electronics and have their continued confidence in our ability to support their technological development and growth plans. Our latest investment once again reinforces Air Products’ commitment to serving our strategic customer, as well as the broader semiconductor and electronics industries, with our safety, reliability, efficiency and excellent service.”

Stock price update

Air Products and Chemicals stock gained 2.3% and closed at $168.61 for the week ending September 14. As a result of the gain, Air Products and Chemicals traded 3.7% above its 100-day moving average price of $162.60. The gains helped Air Products and Chemicals move into the green again on a YTD (year-to-date) basis. The stock has risen 1.7%, while Praxair (PX) and Eastman Chemical (EMN) have gained 1.5% and 5.2%, respectively. International Flavors and Fragrances (IFF) has declined 10.6% YTD.

Analysts are bullish on Air Products and Chemicals stock. Analysts have projected a target price of $190.90, which implies a return potential of 13.2% from its closing price on September 14. Air Products and Chemicals’ 14-day relative strength index of 63 indicates that the stock isn’t overbought or oversold.

Investors could hold Air Products and Chemicals indirectly through the Materials Select Sector SPDR ETF (XLB), which invested 6.7% of its portfolio in Air Products and Chemicals on September 14. XLB declined 0.9% for the week.

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