Is LIN a good stock to buy? We came across a bullish thesis on Linde plc on Astute Optics – US’s Substack. In this article, we will summarize the bulls’ thesis on LIN. Linde plc’s share was trading at $510.36 as of October 22nd 2026. LIN’s trailing and forward P/E were 29.99 and 23.58 respectively according to Yahoo Finance.
This isn’t the first time we see an industrial gases company pitched as a great investment. LIN shares gained 14.43% over the last 12 months. Comparable stocks like Dow and Air Products and Chemicals gained 28.21% and 20.91%, respectively, during the same period. Why are chemical stocks rising, and does LIN’s recent weakness make this a good time to buy?
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In June, we published an article about the 10 Reliable Dividend Stocks to Buy for Long-Term Investors and LIN ranked #2 in that article. While LIN has edged slightly lower since then, the #1 stock in that list returned 13.76% over the same period. So, hedge funds were right about their #1 pick, while LIN’s performance has been more subdued. This article explains why hedge funds were bullish on LIN. Before getting into our analysis, let’s take a look at the business and why some investors like the stock so much.
Linde plc (NASDAQ:LIN) provides industrial gases such as oxygen, nitrogen, argon, hydrogen, and helium to industries including healthcare, electronics, manufacturing, chemicals, and energy. Its long-term onsite contracts are central to the story because customers rely on the company’s infrastructure for a constant gas supply, which creates steady cash flows and pricing power.
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In the second quarter of 2026, Linde plc reported revenue of $9.3 billion, up 9.3% from a year earlier, with strong profitability. The stock trades at about 30 times earnings, slightly above the peer median of roughly 29 times. That small premium suggests investors are paying not just for current earnings, but for years of stability, visible future business, and long-term industrial growth.
The bullish case rests on Linde plc continuing to grow earnings through disciplined pricing, the ability to pass higher energy costs on to customers, and long-term growth projects. Unlike traditional chemical companies that swing with commodity prices, its onsite contracts typically run 15 to 20 years, which helps it stay profitable in good and bad economic times. The numbers back this up. The company earned an operating margin of about 28% and generated $5.1 billion in free cash flow in FY25, meaning it turns a large share of its sales into real cash. You can check out what gives Linde its economic moat and whether that advantage is getting stronger or weaker here.
Management also points to a record backlog of contract-backed projects, which gives the company clear visibility into future business across clean hydrogen, carbon capture, electronics, and advanced manufacturing. If customers keep investing in energy transition projects and new factories, bulls see many years of growth ahead rather than just short-term stability. Management aims for mid-single-digit sales growth through 2030, with profits growing at roughly twice that pace, and expects adjusted earnings per share of $17.70 to $17.90 in FY2026.
Analysts are also supportive. The average price target of about $544.40 implies roughly 17% upside from the current share price of $466.22. That target assumes the company keeps growing earnings through pricing power, project delivery, and clean energy investments. Because the stock already trades at a premium, investors need to watch whether earnings growth stays strong enough to justify it.
Weaker industrial demand is the main risk to this story. If growth holds up as bulls expect, investors should see steady sales volumes and protected profit margins, but that is not guaranteed. Slower industrial activity in China and Europe, higher energy costs, and tighter European carbon rules could squeeze profits and delay projects. With the stock already priced at a premium, there is little room for mistakes.
Another risk for the stock is cost overruns on new gas plants. Long-term contracts provide revenue visibility, but construction spending comes before those projects begin generating cash. Linde warns that its returns depend on completing projects on budget and meeting performance requirements. Higher equipment, labor, or engineering costs could increase the investment needed to deliver the same contracted business. Energy pass-through clauses do not necessarily protect against these construction overruns. Even with healthy demand, higher upfront spending could reduce project returns and leave less cash for shareholders. In our opinion, this could pressure Linde’s price multiples if its record backlog produces weaker returns than investors expect.
Hedge fund positioning shows a cautious signal. As per our database, 92 hedge fund portfolios held Linde plc at the end of the second quarter, down from 104 in the previous quarter. The decline suggests institutional investors trimmed their exposure even though the business model, margins, and growth outlook remain strong. By comparison, Air Products and Chemicals (NYSE:APD) was held by 48 hedge funds, down from 56, Dow Inc. (NYSE:DOW) was held by 49, down from 59, and DuPont de Nemours (NYSE:DD) was held by 35, down from 42. None of these companies saw an increase in hedge fund ownership, which points to broad caution across industrial chemicals. The pattern suggests institutional investors showed the strongest relative conviction toward Linde plc, which saw the smallest pullback, while Air Products and Chemicals saw a moderate reduction in ownership interest, and Dow Inc. and DuPont de Nemours saw the sharpest cuts, as funds adjusted industrial chemicals exposure based on growth expectations, valuation differences, and industrial demand concerns.
Short interest data also paints a fairly calm picture for Linde plc, with just 1.30% of its shares sold short, compared with 2.32% for Air Products and Chemicals, Inc., 5.33% for Dow Inc., and 4.32% for DuPont de Nemours, Inc. Bearish bets are noticeably higher for Dow Inc. and DuPont de Nemours, Inc., which suggests investors are more worried about those two than about Linde plc. While valuation and industrial demand remain concerns ac
Source: finance.yahoo.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.
