Air Products and Chemicals' (APD) stock has dropped around 10% since March, which is viewed as a good buying opportunity given the company's turnaround plan and shift back to its core industrial gas business, RBC Capital Markets said in a note Friday.

Following activist investor Mantle Ridge's campaign in 2024, Chief Executive Eduardo Menezes is focusing on projects with guaranteed demand, ending three speculative projects and selling off parts of the Darrow project to strengthen the company's core operations, the investment firm said, adding it sees the pivot as "beneficial" for the company.

Air Products expects earnings growth from 2026 through 2029, driven by 3% annual volume growth, 1% to 2% pricing gains, and 3% cost cuts, according to RBC.

The company plans to reduce spending by cutting 1,800 jobs in fiscal 2025 and another 2,700 by 2028, leading to potential annual earnings growth of about 3.5% from cost savings alone, RBC analysts said.

Capital spending will be cut in half to $2.5 billion by 2030, aligning better with industry peers and supporting better cash flow and improved financial discipline, RBC said.

The stock is currently trading at a lower valuation than rivals, but analysts believe Air Products can close that gap as its turnaround progresses, according to the note.

RBC initiated coverage of the stock with an outperform rating and $355 price target.

Price: 283.24, Change: +0.04, Percent Change: +0.01