LIN DEU - Embedded Expectations Analysis - 2018 04 18
Linde Aktiengesellschaft (LIN:DEU) currently trades near historical highs relative to UAFRS-based (Uniform) Assets, with a 1.6x Uniform P/B, suggesting fairly bullish expectations for the firm. However, management has concerns about efficiency, margins, and growthSpecifically, management may be exaggerating their satisfaction with the operational improvements they have seen as a result of automation in their cylinder filling plants, and may lack confidence in the sustainability of further investment wins from electronic customers in Asia. Furthermore, they may lack confidence in the sustainability of operating profit margin improvements in their Gases segment, and may be downplaying concerns about declining comparable growth in their Healthcare segment. In addition, they may lack confidence in the sustainability of growth in their Bulk segment driven by growth in Asia, and may be concerned about their ability to increase the margins of all their operating segments in 2018
Linde is a gases and engineering company based in Germany. Co. operates through two divisions. The Gases division provides a range of compressed and liquefied gases as well as chemicals. Co.'s gases are used in the energy sector, in steel production, chemical processing, environmental protection, and welding, as well as in food processing, glass production and electronics. The Engineering division is engaged in industrial plants construction globally, focusing on market segments such as plants for the production of hydrogen and synthesis gas, air separation and olefins as well as plants for natural gas treatment.
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