Air Products Soars Following Mantle Ridge Stake and Wall Street Upgrades

Shares of Air Products and Chemicals experienced a significant increase of over 7% on Monday after reports revealed that activist investor Mantle Ridge has acquired a stake exceeding $1 billion in the company. The investment firm is expected to advocate for strategic changes within Air Products.

According to The Wall Street Journal, Mantle Ridge, led by Paul Hilal, aims to concentrate on succession planning for longtime CEO Seifi Ghasemi as well as enhancing capital allocation and overall company strategy.

Mantle Ridge reportedly believes that Air Products is undervalued compared to its competitors, despite its strong standing in the industrial gas and clean hydrogen sectors.

Wall Street analysts have reacted positively to the news. Evercore ISI has upgraded the stock to an “Outperform” rating, increasing the price target from $305 to $365. They noted, “The FY25 bridge looks more secure than expected. Activist involvement is a beneficial development and aligns with what we were anticipating,” highlighting that Mantle Ridge’s participation could lead to improved capital allocation and risk management.

Citi also commented, suggesting that the activist push could unlock shareholder value, especially given that Air Products’ performance lagging behind rivals Linde and Air Liquide cannot be solely attributed to market conditions. Citi raised its price target for Air Products to $345 and indicated a 90-day positive catalyst watch, suggesting that additional clarity regarding CEO succession and project pipeline updates could enhance investor confidence.

Jefferies joined in the optimism, upgrading Air Products from “Hold” to “Buy” and increasing its price target to $364. The firm believes that the company could refocus on its core industrial gas business, distancing itself from more speculative energy transition projects.

Jefferies stated, “An activist stake would provide Air Products with the opportunity to reset its narrative towards ‘quality growth,’ linking shareholder returns to company initiatives rather than shifts in policy or potential volatility in commodity prices.”