DCF Studio

    APD · NYQ · Basic Materials

    Air Products and Chemicals, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 29.27

    Market price

    USD 316.03

    Implied upside

    -90.7%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-09-30

    Wrong toolThis model values the shares at 9.3% of the market price. A gap that size is a modelling failure rather than a view - most often an unusable beta, a currency or units mismatch, or a cashflow base that does not represent the business. Read the figures below as diagnostics, not as a call.
    AdjustedFree cashflow is negative in at least one forecast year, so terminal value carries most of the valuation.
    AdjustedCapital expenditure runs at 43.6% of revenue against depreciation of 11.6%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 29.27-90.7%
    Exit multiple
    USD 193.56-38.8%
    Market price
    USD 316.03

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    -2bn0bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 12.8bnUSD 13.5bnUSD 14.2bnUSD 14.9bnUSD 15.6bnUSD 16.2bnUSD 16.8bnUSD 17.4bnUSD 17.9bnUSD 18.3bn+4.1%
    EBITUSD 2.8bnUSD 3.0bnUSD 3.2bnUSD 3.3bnUSD 3.5bnUSD 3.6bnUSD 3.7bnUSD 3.9bnUSD 4.0bnUSD 4.1bn+4.1%
    NOPATUSD 2.3bnUSD 2.4bnUSD 2.6bnUSD 2.7bnUSD 2.8bnUSD 2.9bnUSD 3.0bnUSD 3.1bnUSD 3.2bnUSD 3.3bn+4.1%
    Add depreciation & amortisationUSD 1.5bnUSD 1.6bnUSD 1.6bnUSD 1.7bnUSD 1.8bnUSD 1.9bnUSD 1.9bnUSD 2.0bnUSD 2.1bnUSD 2.1bn+4.1%
    Less capital expenditureUSD -5.6bnUSD -5.5bnUSD -5.3bnUSD -5.2bnUSD -4.9bnUSD -4.7bnUSD -4.3bnUSD -3.9bnUSD -3.5bnUSD -3.1bn-6.4%
    Capex, % of revenue43.6%40.6%37.6%34.6%31.7%28.7%25.7%22.7%19.8%16.8%-
    Less increase in working capitalUSD -68.3mUSD -68.2mUSD -67.0mUSD -65.2mUSD -62.8mUSD -59.8mUSD -56.2mUSD -52.0mUSD -47.2mUSD -41.9m-5.3%
    Free cashflow to firmUSD -1.9bnUSD -1.6bnUSD -1.2bnUSD -817.9mUSD -385.8mUSD 86.5mUSD 595.9mUSD 1.1bnUSD 1.7bnUSD 2.3bn-
    Discount factor0.96500.89870.83700.77950.72600.67610.62960.58640.54610.5086-
    Present valueUSD -1.8bnUSD -1.4bnUSD -1.0bnUSD -637.5mUSD -280.1mUSD 58.5mUSD 375.2mUSD 667.6mUSD 933.6mUSD 1.2bn-
    Present Value Of The ForecastUSD -1.9bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.778Reported 0.669, pulled toward 1.0 (Blume)
    Cost of equity8.19%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 13.5x interest cover. Book interest / average debt was lower, at 1.3%.
    Market capitalisationUSD 70.4bn79.3% of capital
    Total debtUSD 18.4bn20.7% of capital, book value as a proxy
    Tax rate19.1%Effective, capped at statutory
    WACC7.38%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 29.27

    108% of EV

    Forecast FCFF, final year
    USD 2.3bn
    Capex at depreciation, working capital in reinvestment
    USD 3.3bn
    Less reinvestment at g/ROIC (30.1% of NOPAT)
    USD -1.0bn
    Capitalised
    USD 2.3bn
    ROIC (reported)
    8.3%
    Terminal value, undiscounted
    USD 49.1bn
    Terminal value, discounted
    USD 25.0bn
    Enterprise value
    USD 23.1bn
    Less net debt
    USD 16.6bn
    Equity value
    USD 6.5bn

    Exit at 19.5x EBITDA

    Value per shareUSD 193.56

    103% of EV

    Terminal value, undiscounted
    USD 121.0bn
    Terminal value, discounted
    USD 61.6bn
    Enterprise value
    USD 59.7bn
    Less net debt
    USD 16.6bn
    Equity value
    USD 43.1bn

    Spread between methods: 147%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    5.38%120.37130.98146.10168.58204.28
    6.38%65.6268.2472.1177.7786.18
    7.38%30.2629.6129.2729.3329.95
    8.38%5.963.992.020.05-1.93
    9.38%-9.58-11.25-12.92-14.58-16.25

    Outlined: this model. Green text: above today's price of 316.03. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-1.8%4.3%18.2%
    EBIT margin24.4%22.3%56.4%
    Discount rate-7.4%4.3%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.