UBS Upgrades These Gas Stocks, Sees Upside Amid Selloff

On Monday, UBS issued a report on Air Products & Chemicals, Inc.

and Praxair, Inc.

after a recent selloff in the energy industry. Currently, analysts rate Air Products & Chemicals as a Buy with a $151 price target and rate Praxair as a Buy with a $109 price target. UBS analysts John Roberts, Edlain Rodriguez, and Joshua Spector gave their opinions on both APD and PX while discussing the reasons why they upgraded the two companies. Air Products & Chemicals: "APD is a defensive stock that is capable of delivering double-digit EPS growth through the cycle. APD is now trading in-line with the S&P after the recent pull-back and we believe the timing now represents a compelling opportunity to invest in this highly defensive stock…" UBS further noted that while revenue has been hurt due to the volatility in the FX markets, margins have continued to increase due to efficient business operations and strong industrial demand for its chemicals and gas products. Praxair: "We believe the timing now represents a compelling opportunity to invest in this highly defensive stock...While we view 1H2016 as having continued headwinds, we see PX margins holding steady and we believe headwinds will abate through 2016 allowing for a return to historical growth in 2017 forward." Analysts wrote that they expect EPS growth of 9% in 2017 driven in particular by increasing demand in Brazil and China, along with the introduction of new projects that have the opportunity to meaningfully contribute to the company's EPS. Currently, Air Products & Chemicals is trading at $129.46, up 2.17 percent. Currently, Praxair is trading at $99.98, down 0.02 percent.