AI-FRA - Embedded Expectations Analysis - 2018 10 08
L'Air Liquide S.A. (AI:FRA) currently trades near recent averages relative toUAFRS-based (Uniform) Earnings, with a 25.3x UAFRS-based P/E. At these levels, the market has bullish expectations for the firm, but management has concerns about their ability to improve their efficiencies, global trade tensions, and growth in developing economies
Specifically, management may lack confidence in their ability to improve their digital capabilities and their efficiencies through capital expenditures. Also, they may lack confidence in their ability to balance their spending on growth and efficiencies, and may be concerned about the repercussions of recent trade conflicts in the steel industry. Furthermore, they appear concerned about the sustainability of improved pricing in their industrial merchant business, and about growth in their energy and industrial merchant segments. Additionally, they may lack confidence in their ability to improve growth across their businesses in developing economies, and may be exaggerating their opportunities in China. Finally, they may be concerned about tensions in hydrogen bidding activity, and about their Smart Innovative Operations
L'Air Liquide is engaged in the market of gases for industry, health and the environment. Oxygen, nitrogen, hydrogen, and rare gases make up Co.'s core activities. Co. structures its activities in three segments: Gas and Services, Engineering and Technology, and Other activities. The Gas and Services segment comprises four business lines: Industrial Merchant, Large Industries, Healthcare and Electronics; Engineering and Technology designs, develops and builds industrial gas production plants for Co. and third parties; and the Other Activities segment develops welding and cutting edge technologies, and markets deep-sea diving and swimming equipment to professionals and privates individuals.
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