Air Products and Chemicals, Inc. (APD) — Fundamental Analysis & Key Financial Ratios

Kaplio's reading: Air Products and Chemicals, Inc.

Updated on October 26, 2026 · accounts published on July 30, 2026

Reading of October 23, 2026: A once steadily profitable business now losing money and carrying heavy debt

Air Products and Chemicals posted a −4.7 % operating margin over the last 12 months, against a 19 % average for fiscal 2014-2025.

• Is Air Products and Chemicals expensive or cheap? At an EV/EBITDA of 19.5× over the last 12 months, it trades 8 % below its seven-year average of 21.1×.
• How is the business doing? Operating margin was −4.7 % over the last 12 months, against a 19 % average for fiscal 2014-2025.
• How strong is the balance sheet? Net debt reached 12.4× EBITDA in fiscal 2025, more than four times the 3.0× ceiling considered healthy in basic materials.
• What to expect from the next earnings? On November 5, 2026, analysts expect EPS of $3.61, above the $3.47 reported on July 30, 2026.
• Can the balance sheet withstand the bottom of the cycle? Altman Z of 2.4 over the last 12 months puts it in the grey zone, short of the 2.99 safe line for basic materials.

Is Air Products and Chemicals expensive or cheap?

Air Products and Chemicals trades at an EV/EBITDA of 19.5× over the last 12 months. That is about 8 % below its seven-year average of 21.1×, inside the 90 % to 110 % band that counts as a fair multiple against its own history. Price to book is less forgiving: 4.9× over the last 12 months, more than double the 2.0× considered reasonable in basic materials. The market has not marked the stock down for the weak year either. It is up 23 % over the last 12 months and sits 2 % below its 52-week high of $314.19. Buyers are paying for a recovery that the current figures do not yet show.

How is the business doing?

Revenue barely moved over the last 12 months (−0.5 %), yet profitability collapsed. Operating margin fell to −4.7 %, against a 19 % average across fiscal 2014-2025, and fiscal 2025 closed at −7.3 %, the lowest of those 12 years. EPS fell 110.3 % year on year. ROIC of 0.1 % sits 9.3 points below the 9.4 % median of 254 sector peers. ROIC has not topped 10 % in any of the last ten fiscal years, so weak returns started well before this slump. Gross margin of 31.4 % in fiscal 2025 still clears the 30 % healthy line, which places the damage further down the income statement.

How strong is the balance sheet?

Net debt stood at $75.24 per share in fiscal 2025, equal to 24.5 % of the current price, and debt to equity is 1.31 over the last 12 months. Measured against an EBITDA squeezed by the margin slump, that debt comes to 12.4×, far above the 3.0× considered healthy for the sector. Liquidity is thin, with a current ratio of 1.08, and the Piotroski score is 2 of 9. The dividend has risen for 11 consecutive fiscal years and yields 2.4 % over the last 12 months. However, free cash flow covered it −2.4× in fiscal 2025, so the business generated no free cash to pay it.

What to expect from the next earnings?

Air Products and Chemicals has beaten EPS estimates in 6 of its last 8 quarters. The most recent beat came on July 30, 2026, with $3.47 against $3.34 expected (+3.9 %). For the results due on November 5, 2026, the consensus is $3.61. Expectations are steady. The 2027 EPS consensus barely moved in the last 30 days, from $14.45 to $14.46 across 13 analysts, and revenue estimates held flat too. Of 42 analysts, 22 rate it a buy, 20 a hold and none a sell. Quarterly EPS stays positive while the trailing operating margin is negative, a gap worth checking in the report.

Can the balance sheet withstand the bottom of the cycle?

In basic materials, profits move with raw material prices, so a P/E on one year's earnings can mislead. What counts is cost position and whether cash and the dividend survive a downturn. On cash, Air Products and Chemicals falls short. Its free cash flow yield was −4.4 % over the last 12 months against a healthy 8 %. Capex ran at 4.5× depreciation in fiscal 2025, three times the top of the 0.8× to 1.5× range, and spending that far above depreciation weighs directly on free cash flow. The Altman Z of 2.4 keeps it out of the danger zone below 1.81 and gross margin passes, but the cushion depends on that spending earning a return.

How this was prepared: the data comes from companies' official filings, collected by a professional provider, and from Kaplio's analysis engine (trailing-12-month ratios, 10 years of history and sector medians computed across US-listed companies). The text is written from that data alone, every figure is checked against it before publication, and it is reviewed when the company reports results. This is not investment advice.