The resignation of Air Products & Chemicals (APD.US) executives led to a downgrade by Deutsche Bank, causing a more than 5% drop in the stock price on Monday.

Shares of Air Products & Chemicals (APD.US) fell 5.46% on Monday, following the announcement that its second-highest executive would be leaving. As part of a management shake-up, the resignation of chief operating officer Samir Serhan has raised concerns about the company’s future profitability, leading Deutsche Bank to downgrade the stock from “Buy” to “Hold” and lower its target price from $310 to $280.

Analysts at Deutsche Bank, David Begleiter and David Huang, noted that Mr. Serhan oversaw the company’s global day-to-day operations and project execution, and his departure could increase the company’s near-term earnings risk, prompting concerns about its future profitability.

The company’s earnings performance has also been uneven over the past year. Analysts said that part of that volatility was due to slower-than-expected Chinese economic growth, reduced demand for industrial gases from the downturn in the Chinese economy, and increased spending to support the company’s $15 billion energy transition project.

To reflect these recent earnings risks, Deutsche Bank analysts have adjusted their fourth-quarter earnings per share (EPS) estimates for Air Products & Chemicals. They have lowered their estimate by $0.05 from the lowest Wall Street consensus to $3.35. They have also lowered their EPS estimate for fiscal 2025 by $0.15 to $13.00.

These adjustments suggest that analysts are taking a cautious view of Air Products & Chemicals’ short- and long-term earnings prospects. Investors considering the company’s stock will need to weigh these developments against their potential impact on the company’s long-term growth potential.