Air Liquide: UBS bets on growth; upgrades to 'buy'

(CercleFinance.com) - UBS this morning upgraded its rating on the French industrial and medical gas group to “buy,” raising its target price from 109 euros to 117 euros.


Analysts have reviewed the chemicals sector overall, which in 2019 is expected to experience its weakest growth since 2015. In addition, commodity prices are expected to threaten margins, while stock valuations are considered as fairly high. In short, UBS has cut its EPS forecast for the sector by 5% in 2019, which only suggests a 4% increase relative to 2018, while the consensus expects +7%.

In this context, UBS intends to "remain defensive" and distinguishes Air Liquide in its sector. The note is positive for Large industry, the French group's second largest segment after Merchant Industrial: in this division, growth is expected to accelerate in 2019 and 2020, thanks to capex planned by clients in the oil and gas sectors and chemicals.

In short, UBS believes that Air Liquide's organic growth in Gas and services will be significantly higher than that of global GDP in 2018, for the first time since 2011.

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