Bernstein: Space demand accelerates, leading industrial gas giants to a significant upside potential

Investing.com – Bernstein’s latest analysis indicates that with the surge in rocket launch demand, industrial gas giants are poised for a decade of strong growth. The rapidly expanding commercial space market will support profit growth across the sector.

Liquid Air

Bernstein reiterates its outperform rating on Liquid Air, noting that although the company has less direct exposure to the U.S. commercial space market compared to peers, it still benefits significantly from the growth in global launch activity.

The brokerage emphasizes Liquid Air’s strong technological expertise in high-purity oxygen and hydrogen, enabling it to capture incremental space-related demand as launch volumes increase.

While the target price remains unchanged, Bernstein believes that the accelerating demand for gases in the space sector could bring notable benefits in the latter half of this decade.

Linde Group

Linde is Bernstein’s most favored stock in this sector, with the brokerage raising its target price. It expects the growth rate of space-related gas demand to significantly outpace previous forecasts.

Bernstein points out that Linde has already supplied critical high-purity gases for major U.S. launch projects and will benefit from the mass production of SpaceX’s Starship heavy-lift rocket.

Since both the space and electronics sectors contribute substantially to future growth, the broker believes that even if other industrial end markets weaken, Linde is likely to outperform the market.

Air Chemical Products Company

Bernstein maintains its outperform rating on Air Chemical Products and has raised its target price, as market confidence in the company’s exposure to high-purity hydrogen and nitrogen used in new launch systems continues to grow.

Although space-related business currently accounts for a small portion of the group’s revenue, Bernstein believes that the rapidly increasing launch demand, combined with favorable pricing environments for ultra-high purity gases, supports a stronger long-term profit trajectory.

The brokerage states that space demand can help “support” the market’s consensus growth expectations in the later part of this decade.

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