Jefferies Comments on Praxair's (PX) Two new HyCO Projects, Maintains Buy Rating and $122 PT
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Rating Summary:
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Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
Rating Summary:
12 Buy, 13 Hold, 3 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 12 | Down: 15 | New: 40
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Jefferies is maintaining its Buy rating and $122 price target on shares of Praxair Inc. (NYSE: PX), but forecasts that the two new HyCO projects could ass $0.07-$0.08 to its 2013 EPS.
Praxair has announced that it will build a 135 million scfd HyCO plant at Valero's St. Charles refinery, and a new 135 million scfd HyCO plant at Valero's Port Arthur refinery. The firm estimates the two contracts could represent $400-$500 million in capital investments and may generate $250-$300 million in sales.
Internationally the company operates 40 hydrogen production facilities and 7 hydrogen pipeline systems, which make up ~7 percent of sales. The firm anticipates that these new contracts should lift Praxair's HYCO platform 22 percent to roughly 1.3 billion scfd, compared to Air Products' HyCO capacity of roughly 5.4 billion scfd.
An analyst at the firm comments, "Using some rough rules of thumb for the contribution from new on-sites, volume growth in its base business, pricing, productivity gains, we estimate Praxair could earn as much as $5.57-$6.08 in 2011 (17%-28% growth), $6.12-$6.62 in 2012 (12%-22% growth), and $7.07-$7.59 in 2013 (12%-20% growth)."
Jefferies current 2011 and 2012 EPS estimates are $5.45 and $6.30.
For more ratings news on Praxair Inc. click here and for the rating history of Praxair Inc. click here.
Shares of Praxair Inc. closed at $100.02 yesterday.
Praxair has announced that it will build a 135 million scfd HyCO plant at Valero's St. Charles refinery, and a new 135 million scfd HyCO plant at Valero's Port Arthur refinery. The firm estimates the two contracts could represent $400-$500 million in capital investments and may generate $250-$300 million in sales.
Internationally the company operates 40 hydrogen production facilities and 7 hydrogen pipeline systems, which make up ~7 percent of sales. The firm anticipates that these new contracts should lift Praxair's HYCO platform 22 percent to roughly 1.3 billion scfd, compared to Air Products' HyCO capacity of roughly 5.4 billion scfd.
An analyst at the firm comments, "Using some rough rules of thumb for the contribution from new on-sites, volume growth in its base business, pricing, productivity gains, we estimate Praxair could earn as much as $5.57-$6.08 in 2011 (17%-28% growth), $6.12-$6.62 in 2012 (12%-22% growth), and $7.07-$7.59 in 2013 (12%-20% growth)."
Jefferies current 2011 and 2012 EPS estimates are $5.45 and $6.30.
For more ratings news on Praxair Inc. click here and for the rating history of Praxair Inc. click here.
Shares of Praxair Inc. closed at $100.02 yesterday.
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