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Praxair's Long-Term Prospects Bright, Near-Term Risks Remain

We issued an updated research report on industrial gas producer and supplier Praxair Inc. PX on Apr 11, 2016. The company is well-recognized globally for the production and distribution of industrial gases.

Over the long term, Praxair is well positioned to leverage benefits from its diversified product portfolio and a large worldwide client base. Also, the company’s efforts to invent products and improvise services, and expand globally through organic and inorganic means deserve a special mention. The company is committed to rewarding its shareholders through dividends and share buybacks, and at the same time, it aims to improve profitability through cost-saving actions.

Despite such positives, Praxair is not immune to headwinds from rising production costs, stiff competition, unfavorable foreign currency movements and extreme dependence on energy. In addition, the company faces risks from geopolitical issues in foreign end markets and high debt levels leading to inflated financial obligations. These uncertainties can adversely impact the company’s growth in the near term.

For 2016, Praxair anticipates headwinds from uncertain global economic conditions as well as 7% negative impact from foreign currency movements.

With a market capitalization of $32 billion, Praxair currently carries a Zacks Rank #3 (Hold). The above-mentioned pros and cons clearly justify the company’s investment value. Over the last 60 days, the Zacks Consensus Estimate on the stock has increased 0.2% to $5.52 for 2016, while the same decreased 0.3% to $6.09 for 2017.

Some better-ranked stocks in the chemical industry include Arkema S.A. ARKAY, Sinopec Shanghai Petrochemical Co. Ltd. SHI and Cabot Corporation CBT. While both Arkema S.A. and Sinopec Shanghai Petrochemical sport a Zacks Rank #1 (Strong Buy), Cabot Corporation holds a Zacks Rank #2 (Buy).

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PRAXAIR INC (PX): Free Stock Analysis Report
 
CABOT CORP (CBT): Free Stock Analysis Report
 
ARKEMA-ADR (ARKAY): Free Stock Analysis Report
 
SHANGHAI PETROC (SHI): Free Stock Analysis Report
 
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