Linde plc Ordinary Shares (LIN)

Conclusion

Linde plc is a global industrial gas company. It produces atmospheric gases such as oxygen, nitrogen and argon, process gases such as hydrogen and helium, and designs and builds the plants that make them. At 520.33 USD on 9 November 2026, the shares carry a market capitalisation of 238.9 billion USD and an enterprise value of 261.6 billion USD.

The verdict is overvalued. Against their own ten-year medians, today's multiples are mixed: price to earnings is 34.1 against a median of 35.2, but enterprise value to EBITDA is 19.7 against 17.1, and price to free cash flow is 47.0 against 32.6. The DCF gives 252.10 USD per share. The fair value band runs from 272.22 to 408.33 USD, with a midpoint of 340.27 USD and a margin of safety of -34.6% at the current price. The reverse DCF implies growth of 17.0% a year, while revenue grew 4.5% a year over five years and free cash flow per share grew 7.4%.

The case rests on return on invested capital of 11.9% against a weighted cost of capital of 8.4%, an operating margin of 26.0% against a ten-year median of 20.6%, and free cash flow after stock-based compensation of 4.9 billion USD. It would weaken with revenue growth of only 0.6% over three years, free cash flow conversion of 72.5% on a trailing basis against 100.8% over five years, and a current ratio of 0.86.

Financial health

Financial strength is green, supported by interest coverage of 36.7, net debt to EBITDA of 1.7 and an Altman Z-score of 4.09, and weighed down only by a current ratio of 0.86. The quick ratio is 0.61 and debt to equity is 0.68. The Altman Z-score sits in the safe zone, although that model was designed for manufacturers and Linde is an industrial gas company, so the reading is indicative. Insolvency risk is low, about 0.25% by the estimate of the Ohlson model over one to two years. The company does not report a debt maturity schedule, so refinancing needs cannot be checked from this data.

Earnings quality

Earnings quality is green. Free cash flow conversion is 72.5% on a trailing basis and 100.8% over five years, and the accrual ratio is -4.1%, which indicates cash earnings above reported earnings. Stock-based compensation is only 0.4% of revenue. The share count fell at a compound rate of 2.5% over five years, which points to buybacks. The Piotroski score is 5 out of 9, and the Beneish M-score of -2.68 is in the unlikely range for manipulation. Linde beat earnings estimates in all eight of the last quarters, by an average of 0.96%. Next-year estimates have been revised down six times and up four times in the last 30 days, a weaker signal than the beat record.

Profitability

Profitability is green. The gross margin of 37.3% is above its ten-year median of 31.1%, the operating margin of 26.0% is above 20.6%, and the net margin of 19.3% is above 13.3%. Operating margin has been stable, at 25.3% on an annual basis. Return on invested capital of 11.9% exceeds the weighted cost of capital of 8.4%, and the given spread of 3.5% is labelled as value creating. Return on equity is 17.8%. The DuPont split shows a net margin of 20.3%, asset turnover of 0.39 and an equity multiplier of 2.27, so part of the return on equity comes from leverage rather than from the business alone.

Growth

Growth is green, although the revenue line is weaker than the rest. Revenue compounded at 0.6% over three years, 4.5% over five years and 12.2% over ten years, and it grew in seven of the last ten years. Earnings per share compounded at 21.4% over three years, 25.6% over five years and 10.6% over ten years. Free cash flow per share fell at 1.3% a year over three years, and grew 7.4% over five years and 10.7% over ten years. Analyst estimates expect earnings growth of 9.2% next year, but the recent three-year revenue trend is flat.

Valuation

Valuation is red. The verdict is overvalued, with a margin of safety of -34.6% at a price of 520.33 USD. Price to earnings of 34.1 sits 3.1% below its ten-year median of 35.2, but enterprise value to EBITDA is 19.7 against a median of 17.1, a premium of 14.9%. Price to free cash flow is 47.0 against 32.6, a premium of 44.2%, and price to book is 6.1 against 5.0, a premium of 21.4%. The DCF gives 252.10 USD per share, using a discount rate of 8.87% and a long-term growth rate of 2.5%. The fair value from historical multiples is 428.45 USD. The reverse DCF implies growth of 17.0% a year, against revenue growth of 4.5% and free cash flow per share growth of 7.4% over five years. The dividend yield is 1.2%, and the dividend absorbs 57.3% of free cash flow. The fair value band is an order of magnitude built on fixed assumptions, not a price target.

Risks

The weakest numbers are the current ratio of 0.86, the trailing free cash flow conversion of 72.5%, and the three-year revenue growth of 0.6%. A current ratio below one leaves less short-term liquidity, and weaker conversion would reduce the cash behind the dividend and buybacks. Flat revenue would make the implied growth of 17.0% harder to reach. Next-year estimate downgrades outnumber upgrades, and the valuation premiums on price to free cash flow and enterprise value to EBITDA leave little room for disappointment. This analysis has limits: it has no debt maturity schedule and no revenue by segment, so refinancing and segment-level risks cannot be judged.