What’s Next For Air Products Stock?
It’s not often that a company known for stability, steady dividends, and quiet execution finds itself down nearly 25% in a single year, yet that is exactly what happened to Air Products & Chemicals (NYSE: APD). For a stock that rarely makes dramatic moves, the fall from around $315–$330 levels a year ago to roughly $236 in late 2025 has shocked many long-time shareholders. The decline is even more surprising considering APD’s reputation as one of the safest industrial-gas plays in the world.
If you seek an upside with less volatility than holding an individual stock, consider the High Quality Portfolio. It has comfortably outperformed its benchmark—a combination of the S&P 500, Russell 2000, and S&P MidCap indexes—and has achieved returns exceeding 105% since its inception. Separately, see –What’s Behind Dollar Tree Stock’s 70% Surge?
A Harsh Strategic Reset Triggered the Downturn
The most immediate factor behind APD’s drop was the company’s sweeping strategic reset in 2025. For years, management invested aggressively in large-scale clean-energy, hydrogen, and LNG projects, hoping to position APD as a leader in the energy transition. But those ambitions unraveled when the company announced that it would exit several of these capital-heavy ventures. That decision forced APD to take a massive $2.3 billion after-tax charge, which cascaded into a reported GAAP net loss of about $1.7 billion for the fiscal second quarter of 2025.
Even on an adjusted basis, earnings showed weakness: APD reported $2.69 in EPS for the same quarter, down approximately 6% from the previous year. Those numbers dramatically altered investor perception. What had been pitched as a growth story suddenly looked like a company retrenching and acknowledging misallocated capital.
Underlying Weakness Added Pressure
The strategic missteps were only part of the story. APD’s core business faced its own challenges during the year. Revenues hovered around $12 billion for fiscal 2025—flat compared to prior years—reflecting weak volume trends, softness in key segments such as helium, and macroeconomic pressure across Europe and Asia. The company also completed the divestiture of its LNG technology business, which further reduced the scale of its operations.
While APD managed to pass through some price increases, they were not enough to offset lower customer demand and sluggish industrial activity. The combination of muted revenue growth, declining volumes, and strategic uncertainty created a narrative of stagnation, not expansion.
Leadership Changes Created More Uncertainty
Adding to investor unease was a period of leadership turnover. A new CEO, Eduardo F. Menezes, stepped in following a high-profile proxy battle involving activist fund Mantle Ridge. While leadership transitions are not unusual, the timing—right as APD was unwinding major projects—raised legitimate concerns about the company’s long-term direction.
Investors questioned whether APD would continue chasing energy-transition megaprojects or revert to its traditional industrial-gas roots. The write-downs made it clear that the company was choosing to refocus, but that shift also meant the ambitious growth narrative of the past several years was no longer intact.
Macro Headwinds Weighed on Results
Industrial gas demand is closely tied to global manufacturing and energy activity, both of which were sluggish in 2025. Several regions, including parts of Asia and Europe, reported weaker output, and helium markets in particular saw softer demand. APD, with its global footprint, was exposed to these pressures. Market-wide uncertainty in the energy and chemicals sector further dampened sentiment, leaving APD without the defensive premium it typically enjoys.
Is the Worst Over — Or Is More Volatility Ahead?
Despite the rough year, APD retains qualities that appeal to long-term investors. The company continues to generate healthy cash flows from its basic industrial-gas operations, and its dividend yield—hovering around 2.7% to 2.9%—offers stability in an otherwise volatile year.
However, the path forward will depend heavily on APD’s ability to restore margin growth, rebuild investor confidence, and demonstrate that it can expand profitably without taking on excessive risk. The company’s cautious stance toward large energy-transition projects suggests management is prioritizing stability over bold bets, but that shift may limit long-term growth potential unless industrial-gas demand strengthens globally.
For now, APD’s 25% decline stands as a reminder that even the most dependable industrial names can stumble when strategy, demand, and macro conditions all turn at once. The recovery is possible—but it will require patience, execution, and a clearer vision than the company delivered over the past year.
Now, we apply a risk assessment framework while constructing the Trefis High Quality (HQ) Portfolio, which, with a collection of 30 stocks, has a track record of comfortably outperforming the S&P 500 over the last 4-year period — and has achieved returns exceeding 105% since its inception. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride as evident in HQ Portfolio performance metrics.
Invest with Trefis Market-Beating Portfolios
See all Trefis Price Estimates