DCF Tool

APD

Air Products & Chemicals Inc. – Industrial Gas Manufacturing
Air Products is a world-leading industrial gases company in operation for 80 years. Focused on serving energy, environment and emerging markets, the Company provides essential industrial gases, related equipment and applications expertise to customers in dozens of industries, including refining, chemical, metals, electronics, manufacturing, and food and beverage. Air Products is also the global leader in the supply of liquefied natural gas process technology and equipment. The Company develops, engineers, builds, owns and operates some of the world's largest industrial gas projects, including: gasification projects that sustainably convert abundant natural resources into syngas for the production of high-value power, fuels and chemicals; carbon capture projects; and world-scale carbon-free hydrogen projects supporting global transportation and the energy transition. The Company had fiscal 2020 sales of $8.9 billion from operations in 50 countries and has a current market capitalization of about $60 billion. More than 19,000 passionate, talented and committed employees from diverse backgrounds are driven by Air Products’ higher purpose to create innovative solutions that benefit the environment, enhance sustainability and address the challenges facing customers, communities, and the world.
Analysis Results
Intrinsic Value $270.35
Latest Price $232.73
Relative Value 14% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 14.4%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 6.5%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 14.4%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 1.86 1.75
2023 2.13 1.88
2024 2.43 2.02
2025 2.78 2.17
2026 3.19 2.33
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 72.6 billion. This corresponds to a present value of 49.8 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 10.1 billion. Adding in the terminal value gives a total present value of 60.0 billion.

There are presently 222.0 million outstanding shares, so the intrinsic value per share is 270.35.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 16,752,600,000
Current Cash 11,601,600,000
Current Liabilities 5,598,200,000
Current Debt 973,800,000
Non-Cash Working Capital (NCWC) 526,600,000
Change in NCWC 138,600,000
EBIT 5,018,200,000
Tax Provision 925,600,000
Depreciation and Amortization 2,642,600,000
Capital Expenditure -4,928,400,000
Unlevered Free Cash Flow 1,944,772,449
Current Assets 8,684,900,000
Current Cash 6,357,900,000
Current Liabilities 2,416,700,000
Current Debt 477,700,000
Non-Cash Working Capital (NCWC) 388,000,000
Change in NCWC -93,300,000
EBIT 2,403,200,000
Tax Provision 478,400,000
Depreciation and Amortization 1,185,000,000
Capital Expenditure -2,509,000,000
Unlevered Free Cash Flow 511,565,946
Current Assets 4,618,300,000
Current Cash 2,414,700,000
Current Liabilities 1,820,900,000
Current Debt 98,600,000
Non-Cash Working Capital (NCWC) 481,300,000
Change in NCWC 252,500,000
EBIT 2,335,900,000
Tax Provision 480,100,000
Depreciation and Amortization 1,082,800,000
Capital Expenditure -1,989,700,000
Unlevered Free Cash Flow 1,191,670,085
Current Assets 5,082,200,000
Current Cash 2,976,000,000
Current Liabilities 2,338,300,000
Current Debt 460,900,000
Non-Cash Working Capital (NCWC) 228,800,000
Change in NCWC -41,700,000
EBIT 2,113,000,000
Tax Provision 524,300,000
Depreciation and Amortization 970,700,000
Capital Expenditure -1,568,400,000
Unlevered Free Cash Flow 923,800,545
Current Assets 5,876,700,000
Current Cash 3,677,600,000
Current Liabilities 2,489,000,000
Current Debt 560,400,000
Non-Cash Working Capital (NCWC) 270,500,000
Change in NCWC -569,300,000
EBIT 1,761,700,000
Tax Provision 260,900,000
Depreciation and Amortization 865,800,000
Capital Expenditure -1,039,700,000
Unlevered Free Cash Flow 693,927,208
Current Assets 4,317,300,000
Current Cash 1,501,300,000
Current Liabilities 3,283,300,000
Current Debt 1,307,100,000
Non-Cash Working Capital (NCWC) 839,800,000
Change in NCWC -146,400,000
EBIT 2,309,100,000
Tax Provision 586,500,000
Depreciation and Amortization 925,900,000
Capital Expenditure -1,055,800,000
Unlevered Free Cash Flow 1,397,640,469
Current Assets 2,910,800,000
Current Cash 206,400,000
Current Liabilities 3,648,100,000
Current Debt 1,929,900,000
Non-Cash Working Capital (NCWC) 986,200,000
Change in NCWC -303,000,000
EBIT 2,049,800,000
Tax Provision 415,900,000
Depreciation and Amortization 936,400,000
Capital Expenditure -1,614,800,000
Unlevered Free Cash Flow 576,613,544
Current Assets 3,294,800,000
Current Cash 336,600,000
Current Liabilities 2,963,000,000
Current Debt 1,294,000,000
Non-Cash Working Capital (NCWC) 1,289,200,000
Change in NCWC 310,800,000
EBIT 1,781,900,000
Tax Provision 366,000,000
Depreciation and Amortization 956,900,000
Capital Expenditure -1,684,200,000
Unlevered Free Cash Flow 883,912,070
Current Assets 3,439,100,000
Current Cash 450,400,000
Current Liabilities 3,227,600,000
Current Debt 1,217,300,000
Non-Cash Working Capital (NCWC) 978,400,000
Change in NCWC -800,000
EBIT 1,699,500,000
Tax Provision 307,900,000
Depreciation and Amortization 907,000,000
Capital Expenditure -1,524,200,000
Unlevered Free Cash Flow 694,002,925
Current Assets 3,415,800,000
Current Cash 454,400,000
Current Liabilities 2,689,900,000
Current Debt 707,700,000
Non-Cash Working Capital (NCWC) 979,200,000
Change in NCWC -80,800,000
EBIT 1,659,800,000
Tax Provision 287,300,000
Depreciation and Amortization 840,800,000
Capital Expenditure -1,521,000,000
Unlevered Free Cash Flow 535,477,683

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