| Valuation method | Value, CHF | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | n/a | |
| Graham Formula | 108.20 | -47 |
Linde plc (LIN.SW) is a global leader in industrial gases and engineering, serving diverse industries such as healthcare, petroleum refining, manufacturing, food and beverage, electronics, and aerospace. Headquartered in Guildford, UK, Linde operates across North and South America, Europe, the Middle East, Africa, and the Asia Pacific. The company provides essential gases like oxygen, nitrogen, argon, hydrogen, and specialty gases, alongside turnkey plant construction for industries requiring large-scale gas production. With a history dating back to 1879, Linde has established itself as a critical supplier in the specialty chemicals sector, supporting high-growth industries with innovative gas solutions. Its extensive infrastructure, technological expertise, and global footprint make it a key player in the industrial gas market, ensuring stable demand across economic cycles. Linde’s strong cash flow generation and disciplined capital allocation further reinforce its position as a resilient investment in the basic materials sector.
Linde plc presents a compelling investment case due to its dominant market position, diversified revenue streams, and strong financial performance. With a market capitalization exceeding CHF 103 billion and robust operating cash flow of CHF 8.86 billion in 2022, the company demonstrates financial stability. Its net income of CHF 4.15 billion and diluted EPS of CHF 8.23 reflect efficient operations, while a dividend of CHF 4.99 per share underscores shareholder returns. However, the company’s high total debt (CHF 17.91 billion) and capital-intensive business model pose risks, particularly in volatile economic conditions. Linde’s low beta (0) suggests defensive characteristics, making it a potential hedge against market downturns. Investors should weigh its steady cash flows against exposure to industrial cyclicality and geopolitical risks in key markets.
Linde plc holds a competitive advantage through its global scale, technological leadership, and long-term customer contracts. As one of the largest industrial gas suppliers, it benefits from economies of scale in production and distribution, reducing costs compared to smaller rivals. Its extensive R&D capabilities enable innovation in gas applications, particularly in hydrogen and carbon capture, positioning it well for the energy transition. Linde’s engineering division further differentiates it by offering integrated gas solutions, a service few competitors can match. However, the company faces intense competition from other industrial gas giants, particularly in regional markets where local players may have cost advantages. Pricing pressure in commoditized gases and regulatory hurdles in expanding hydrogen infrastructure could also limit growth. Linde’s merger with Praxair in 2018 strengthened its North American presence, but integration risks and antitrust scrutiny in certain regions remain ongoing challenges. Its ability to maintain high margins (evidenced by strong net income) despite these pressures highlights operational excellence.