4 Feb

APD Enters an Agreement to Collaborate with Saudi Aramco


New collaboration

On January 25, Air Products and Chemicals (APD) announced that it has entered into an agreement with Saudi Aramco. Through the collaboration, the companies aim to jointly build the first hydrogen fuel cell vehicle fueling station in Saudi Arabia. However, Air Products and Chemicals didn’t disclose the financial aspects of the collaboration.

APD Enters an Agreement to Collaborate with Saudi Aramco

Air Products and Chemicals’ expertise in hydrogen and Saudi Aramco’s industrial experience make the collaboration stronger. The intended new hydrogen fuel station is expected to be at Air Products and Chemicals’ new Technology Center in the Dhahran Techno Valley Science Park. The project is expected to become operational by the second quarter.

Dr. Sanir Serhan, Air Products and Chemical’s executive vice president, said, “We are honored to work on another venture with Saudi Aramco to establish and develop a sustainable hydrocarbon-based hydrogen supply system for pilot demonstration of a fuel cell vehicle fleet in Saudi Arabia. It further illustrates our commitment to the Kingdom’s 2030 vision.”

Stock price update

Air Products and Chemicals stock gained ~3.1% and closed at $165.89 for the week ending February 1. As a result, there was a trend reversal in the company’s 100-day moving average price. The stock traded ~3.7% above its 100-day moving average price of $160.04. Air Products and Chemical’s YTD (year-to-date) gain is ~3.2%. Eastman Chemical (EMN), Celanese (CE), and International Flavors and Fragrances (IFF) have gained ~13%, 10.3%, and 7.1%, respectively.

Analysts are bullish on Air Products and Chemicals stock. Analysts have projected a target price of $187.5, which implies a return potential of ~13.0% from the closing price on February 1. Air Products and Chemicals’ 14-day relative strength index of 65 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). XLB has invested 5.9% of its portfolio in Air Products and Chemicals on February 1. XLB gained o.7% for the week.

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