Shares of Praxair Inc. (PX) touched a new 52-week high of $131.0 during the trading session on Jan 8. This is an increase over the previous high of $130.58 reached on Dec 31.
Praxair’s shares closed at $130.93 at the end of trading on Jan 8, with a solid year-to-date return of 17.3%. The volume of shares traded during that session was 1.3 million. Further upside potential exists for this Zacks Rank #4 (Sell) industrial gas producer and supplier as reflected in its projected earnings growth rate of 11.5% for the next five years and positive revisions in earnings estimates for 2014.
Growth Drivers
Long-term growth prospects are bright for Praxair especially on the back of growing demand for industrial gases for use in diverse industries, including hydrogen for refining; oxygen for healthcare; and nitrogen and carbon dioxide for oil and gas production. Also, customers’ preference for Praxair’s world class technology, high quality products and gas supply services would drive solid earnings growth, going forward.
The majority of Praxair’s business runs on long-term contracts, which provide a stable cash flow. The company’s set-up of a carbon dioxide purification facility at the Honeywell Resins & Chemicals site in Hopewell, Va. is worth mentioning in this regard. The long-term agreement signed between the two parties has further strengthened their business relations.
Estimate Revisions Show Potency
Over the last 30 days, the Zacks Consensus Estimate for Praxair has edged up 0.1% to $6.68 for 2014. Moreover, Earnings ESP for the company is currently at +1.5% for 2014.
Praxair currently has a market capitalization of $38.5 billion. However, some better-ranked stocks in the industry include Johnson Matthey plc (JMPLY), PPG Industries Inc. (PPG) and Olin Corp. (OLN). While Johnson Matthey carries a Zacks Rank #1 (Strong Buy), both PPG Industries and Olin Corp hold a Zacks Rank #2 (Buy).
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