Sustainable Growth Advisers, LP on Linde
Thesis
SGA reinitiated Linde after the share price consolidated while fundamentals continued to improve. The investment case rests on a highly durable industrial-gas model with long-term recurring contracts, essential end markets, strong pricing power and cash flow visibility. SGA expects medium-term growth to benefit from an industrial recovery in the United States, higher semiconductor manufacturing, refinery utilization and a stabilization in Europe, while Asia-Pacific should reaccelerate. Additional upside could come from helium pricing and rising space-launch activity.
“Linde remains an attractive long-term investment, supported by a highly durable business model and meaningful structural advantages.”
Key risks
- European volumes have been weak and the pace of stabilization is uncertain.
- Most helium volumes are sold under long-term contracts, limiting near-term upside from elevated helium pricing.