Q3 Earnings Preview for Linde plc (LIN)

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Linde plc (NYSE:LIN) is scheduled to report Q3 earnings results pre-market on November 12, 2019. The company is expected to report earnings of $1.78/share on revenue of $7.155 billion. The consensus earnings per share (EPS) of $1.78/share is based on a poll of 11 analysts and represents a growth of 5.3% over the same quarter last year when the company reported earnings of $1.69/share.

The revenue forecast of $7.155 billion based on a poll of 9 analysts implies a year-over-year (YoY) growth of 136.6%. Last year the company reported $3.024 billion in revenue for the quarter.

Expected to report EPS growth of $0.09/share for Q3, 2019
Metric Expected Prior Year YoY Change
Revenue $7,155.00 $3,024.00 136.6%
EPS $1.78 $1.69 5.3%

News about the company has generally been positive as of late – on November 7th the company announced it has signed a long-term agreement with a major electronics company in Taiwan as part of a joint venture, Linde LienHwa (LLH). The company will invest approximately $100 million to build three new on-site plants as part of the deal.

Earnings Call Trends

Historically, management has exceeded analyst expectations 6 out of the last 7 tracked quarters, and missed expectations 1 quarters. What are your expectations from Linde for this earnings this quarter? Let us know in the comments!

Analyst Expected vs Reported EPS
Quarter Expected Reported Surprise Result
Q2, 2019 $1.72 $1.83 6.4% Beat
Q1, 2019 $1.55 $1.69 9.0% Beat
Q3, 2018 $1.70 $1.69 -0.3% Missed
Q2, 2018 $1.70 $1.72 1.2% Beat
Q1, 2018 $1.56 $1.65 5.8% Beat
Q4, 2017 $1.48 $1.52 2.7% Beat
Q3, 2017 $1.44 $1.50 3.8% Beat

How important are earnings reports to Linde’s stock price performance? The “Price Day Prior” column shows the closing stock price on the day before the earnings report, and the “Price Next Day” column shows the stock price at the end of the trading day after the earnings report. After the last earnings report for the period ending June 30, 2019, the stock price did not react much to the update even though the company beat earnings expectations by 6.4%.

Stock Price Performance After Earnings
Report Date Price Day Prior Price Next Day Change % Result
2019-08-05 $187.71 $188.76 0.6% Increase
2019-05-10 $173.35 $181.59 4.8% Increase
2019-03-01 $173.24 $168.38 -2.8% Decline
2018-11-09 $165.30 $161.52 -2.3% Decline

Fundamentals And Technical Analysis

Linde is currently trading at $202.29/share, down -0.3% for the day. The company is trading at approximately 97.8% of its 52 week high of $206.82/share.

The company’s stock price is up 7.8% since the last earnings report and up 2.1% over the previous week. The company’s 14 Day Relative Price Index (RSI) of 64.94 suggests the company is trading in technically neutral territory.

The current share price implies a price-to-earnings (P/E) multiple of 25.3x and a forward P/E multiple of 28.4x. At this price, the company has a secure dividend yield of 1.7%.

Linde’s current share price also implies a price-to-book (P/B) multiple of 2.2x. The following table summarizes some other key fundamental ratios:

Data as of November 11, 2019
Metric Value
Last Fiscal Period FY2019.Q2
Period End Date June 30, 2019
Stock Price (Current) $202.29
P/E Ratio 25.3x
P/E Ratio (Fwd) 28.4x
PEG Ratio 3.1
Total Debt to Capital (%) 11.8%
Levered Free Cash Flow $1.452 billion
Enterprise Value / EBITDA 19.5x

Company Profile: Linde plc

Linde plc is a large-cap stock with a market capitalization of $109.3 billion and a total enterprise value of $123.8 billion. The company operates in the Materials sector and Chemicals industry.

Linde plc operates as an industrial gas company in primarily North and South America, Europe, the Middle East, Africa, and the Asia Pacific. The company offers oxygen, nitrogen, argon, rare gases, carbon monoxide, carbon dioxide, helium, hydrogen, electronic gases, specialty gases, and acetylene. It also designs and constructs turnkey process plants, such as olefin, natural gas, air separation, and hydrogen and synthesis gas plants.

In addition, the company supplies wear-resistant and high-temperature corrosion-resistant metallic and ceramic coatings and powders for aircraft, energy, printing, primary metals, petrochemical, textile, and other industries; and manufactures a line of electric arc, plasma and wire spray, and high-velocity oxy-fuel equipment. It serves healthcare, petroleum refining, manufacturing, food, beverage carbonation, fiber-optics, steel making, aerospace, chemicals, and water treatment industries.

Linde plc has a collaboration agreements with ExxonMobil to develop open process automation systems. Linde plc was founded in 1879 and is based in Guildford, the United Kingdom.

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