Air Products & Chemicals Inc. (APD) just did something that usually makes investors cringe: it killed a flagship project. But instead of a sell-off, the stock surged more than 9% on Tuesday. Why? Because the project wasn't making enough money, and investors are thrilled to see management finally pull the plug.
The company announced it will not proceed with its Louisiana Clean Energy Complex, a massive clean hydrogen project, after concluding it no longer met its return criteria. The decision will result in pre-tax charges of up to $2.9 billion (about $2.2 billion after tax) in the fiscal third quarter of 2026, mostly for asset write-downs and contract terminations. Air Products is also discontinuing a zero-carbon liquid hydrogen facility in Casa Grande, Arizona, and several smaller clean-energy distribution projects, citing weak commercial conditions, project-specific economic challenges, and slower-than-expected growth in hydrogen-for-mobility markets.
In other words, the clean energy boom isn't happening as fast as everyone hoped, and Air Products is cutting its losses.
But it's not all doom and gloom. Separately, the company said it is finalizing a marketing and distribution agreement with Yara International ASA for renewable ammonia from the NEOM Green Hydrogen Project in Saudi Arabia. That deal is independent of the Louisiana project decision, so the company is still keeping a toe in the clean energy waters—just with a more disciplined approach.
Technical Analysis: A Rally With a Caveat
Tuesday's rally pushed Air Products further above its key moving averages. The stock traded about 5.8% above its 20-day simple moving average of $280.95 and roughly 8.6% above its 200-day SMA of $273.66, reinforcing the longer-term uptrend. Momentum also improved: the moving average convergence/divergence (MACD) indicator remained above its signal line with a positive histogram, suggesting buying pressure continues to strengthen.
However, there's a wrinkle. The 20-day SMA remains below the 50-day SMA, indicating that short-term momentum has not fully confirmed the breakout. So while the long-term trend looks good, the near-term picture is still a bit messy. The next resistance level sits near $307.50, just below the 52-week high of $307.96. Initial support is around $274.50, close to the 200-day moving average.
Earnings and Analyst Outlook
Air Products is expected to report fiscal third-quarter results on or around July 30. Wall Street expects earnings of $3.34 per share, up from $3.09 a year earlier, on revenue of $3.19 billion, compared with $3.02 billion in the prior-year quarter.
The stock trades at about 28.6 times forward earnings, reflecting a premium valuation. Analysts maintain a consensus Buy rating with an average price forecast of $321.44. Recent analyst actions include:
- Morgan Stanley maintained an Equal-Weight rating and raised its price forecast to $310 on May 5.
- RBC Capital maintained an Outperform rating and raised its price forecast to $341 on May 5.
- UBS maintained a Neutral rating and raised its price forecast to $316 on May 1.
Top ETF Exposure
Because APD carries significant weight in several materials ETFs, any significant inflows or outflows for these funds will likely force automatic buying or selling of the stock. The top ETFs with exposure to APD include:
- State Street Materials Select Sector SPDR ETF (XLB): 4.69% Weight
- The Materials Select Sector SPDR Fund (XLB): 4.66% Weight
- Vanguard Materials ETF (VAW): 4.08% Weight
Price Action
Air Products shares were up 9.33% at $296.68 at the time of publication on Tuesday.
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