On Monday, JPMorgan adjusted its price target for Linde (NASDAQ:NYSE:LIN) shares, a leading industrial gas company, raising it to $480 from the previous $454 while maintaining an Overweight rating on the stock.
The firm's analyst highlighted Linde's updated forecast for its 2024 annual earnings per share (EPS), which contributed to the company's shares remaining stable in a market where the S&P 500 experienced a decline of approximately 2%.
Linde reported that its year-over-year volumes for the second quarter of 2024 were consistent with the previous year and showed a similar flat to downward trend for the first half of the year. However, the company saw a price increase of 3% year-over-year in the second quarter and an overall rise of 2%-3% for the first half of 2024.
Sequential industrial gas prices also saw a 1% increase in each of the first two quarters, which is expected to support earnings stability and potential growth for Linde in 2025.
The analyst noted that Linde has not embarked on any significant cost-reduction programs. In the second quarter of 2024, Linde's cost of goods sold decreased by 1.5%, while revenues saw a modest rise of 0.8%, indicating effective cost management.
This resulted in an operating income increase of $136 million for the second quarter, driven by a $63 million sales increase due to the higher prices.
Furthermore, JPMorgan revised its EPS estimate for Linde upwards from $15.55 to $15.60, anticipating a 10% growth compared to Linde's EPS of $14.20 in 2023.
Looking ahead, the analyst does not foresee significant changes in Linde's business dynamics for 2025 and estimates an EPS of $17.20 for the year, which would represent another 10% growth.
In other recent news, Linde, the industrial gas giant, has been experiencing some significant developments. Deutsche Bank maintained a Buy rating on Linde and raised the price target to $510, citing volume recovery as a key factor.
The bank anticipates Linde's first year-over-year volume growth since 2022 in the upcoming third quarter. Linde's earnings are expected to grow, with potential mid-teens earnings per share growth surpassing the current projection of 10%.
In addition, Linde's Annual General Meeting resulted in the approval of executive pay, the election of directors, and the ratification of PricewaterhouseCoopers as the independent auditor.
The company also reported a record second-quarter earnings per share of $3.85, despite a flat year-on-year volume trend. The full-year EPS guidance is set between $15.40 and $15.60, assuming no change in the economic climate.
These recent developments indicate Linde's financial discipline and strategic positioning. The company's focus on growth sectors and prudent capital management, including share repurchases, are expected to maintain its industry-leading performance, according to company executives and analyst notes.
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