Linde shares gain on earnings beat, strong 2026 guidance
Industrial gas leader projects 6-9% profit growth despite energy cost headwinds
Linde plc shares rose more than 2% in early Thursday trading after the industrial gas manufacturer reported fourth-quarter earnings that exceeded analyst expectations and issued robust profit guidance for 2026, demonstrating resilience despite ongoing concerns about energy costs and industrial demand.
The world's largest industrial gas company by market share reported adjusted earnings per share of $4.20 for the final quarter of 2025, representing a 6% increase from the prior year and topping analyst estimates that ranged from $4.17 to $4.18. Revenue climbed 6% year-over-year to $8.8 billion, surpassing the consensus forecast of approximately $8.64 billion.
For the full year 2025, Linde generated adjusted EPS of $16.46, up 6% from 2024, on revenue of $34.0 billion. The company's adjusted operating margin for the fourth quarter stood at 29.5%, while operating cash flow increased 8% to $3.0 billion.
"Linde enters 2026 with the industry's best EBITDA margins, exceeding 28%, and a dominant 32% global market share," analysts at Investing.com noted, highlighting the company's competitive advantages.
Management projected full-year 2026 adjusted EPS of $17.40 to $17.90, representing 6% to 9% growth, or 5% to 8% excluding foreign exchange impacts. For the first quarter, the company expects adjusted EPS between $4.20 and $4.30, signaling confidence in continued momentum despite anticipated headwinds.
The strong performance comes after a challenging period for investor sentiment, with EPS estimates having been revised downward by 43% over the past 60 days amid concerns about cost pressures and margin compression. A sharp spike in natural gas prices on New Year's Day 2026 is expected to pressure first-quarter margins, a factor Linde addressed in its outlook.
Analysts had been particularly focused on pricing dynamics and regional volume trends, noting sluggish industrial activity in Europe and a slow recovery in China. Despite these challenges, Linde's pricing power remained intact, supported by resilient end markets including healthcare and food and beverages, along with robust long-term contracts with major on-site clients.
The company maintains a substantial project backlog of $10.0 billion, with approximately $8 billion to $10 billion allocated to low-carbon hydrogen initiatives. Linde has committed to investing up to $50 billion in clean energy projects over the next decade, including major facilities coming online in 2025 and 2026 such as a 35-megawatt electrolyzer in Niagara Falls, New York, and a $1.8 billion complex in Beaumont, Texas.
Wall Street maintains a constructive view on Linde's prospects, with 23 of 28 analysts rating the stock a "Buy" and a consensus price target suggesting approximately 8.5% upside from current levels. The company has consistently exceeded earnings expectations, having beaten analyst estimates in every quarter over the past two years.
Linde's stock, which has a 52-week range of $387.78 to $483.05, currently trades at a forward price-to-earnings ratio of 25.7, reflecting premium valuation for its industry-leading margins and growth visibility in the expanding hydrogen economy.