UPDATE: Citigroup Reiterates Neutral Rating, Lowers PT on Air Products & Chemicals

In a report published Monday, Citigroup reiterated its Neutral rating on Air Products & Chemicals APD, but lowered its price target from $88.00 to $83.00. Citigroup noted, “We rate the shares of Air Products & Chemicals Inc. (APD) Neutral. We like the industrial gas business model given its defensive growth characteristics through long-term take-or-pay contracts. However, the merchant business has struggled to generate consistent margin improvement, and volume growth has lagged. We believe the company was less focused on this business during its pursuit of Airgas, and was forced to hire new salespeople after the bid was unsuccessful. However, incremental sales will take time to materialize, adding risk to longer-term targets. Plus, European exposure presents an additional challenge to top-line growth.” Air Products & Chemicals closed on Friday at $79.99.