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BofA Reaffirms Air Liquide at Buy Amid Reports of Elliott Management Stake

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BofA Global Research on Wednesday reiterated its buy rating on Air Liquide (AI.PA) amid chatter that Elliott Management built a stake in the French industrial gas group.

The Financial Times recently reported, citing people familiar with the matter, that the activist hedge fund engaged with Air Liquide in recent weeks after building its shareholding. Meanwhile, sources told Reuters that Elliott is reportedly pushing for improvements to make the group more competitive in the industrial gases industry.

"Neither the size of the position nor Elliott's specific demands were disclosed. Air Liquide nevertheless appears an unusual activist target, in our view: (1) Near record share price, (2) elevated 67% P/E premium to the market (SXXP), (3) Record EUR6b order backlog, supercharged by a drumbeat of recent Electronics wins. The reported move by Elliott comes around 4 weeks before Air Liquide's CMD to 2030, where we expect a focus on organic growth, particularly Electronics, margin targets and possibly some light on capital allocation priorities," the research firm said, noting that talks between the two entities were reportedly centered on narrowing the margin gap with industry peer Linde (LIN.F).

The price objective for Air Liquide's stock stands at 200 euros.

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