Linde PLC: A Quality Growth Story at a Discount in a Stabilizing Industrial Sector

The industrial sector is entering a phase of maturity, marked by stabilizing vacancy rates, slowing construction pipelines, and a shift toward demand-driven development, according to a Credaily report. As of Q3 2025, net absorption hit 60 million square feet-the strongest quarterly total since early 2023-while vacancy rates rose modestly to 7.4%, the smallest quarterly increase since late 2022, the report notes. This stabilization reflects a maturing market where tenants gain leverage and developers adopt selective strategies. For industrial sector players like Linde PLC, this environment presents both challenges and opportunities.

Linde has positioned itself at the forefront of the energy transition by leveraging its expertise in small-scale LNG solutions. The company's compact OPTI-LNG skidded liquefaction plants, tailored for on-site applications, have driven strong market traction in 2024, according to a Linde Group press release. This aligns with global trends toward cleaner fuels and off-grid energy solutions, supported by government policies and rising demand for modular infrastructure, the release states. Linde's focus on innovation and sustainability not only addresses immediate market needs but also future-proofs its operations in a sector increasingly prioritizing decarbonization.

Linde's Q3 2025 financial results underscore its resilience and growth potential. The company reported a 7% year-over-year increase in earnings per share (EPS), reaching $4.21, according to a GuruFocus report. Operating cash flow rose by 8%, and free cash flow hit $1.7 billion, reflecting robust operational efficiency, the GuruFocus report adds. Notably, Linde allocated $4.2 billion to business expansion while returning $5.3 billion to shareholders-a balanced capital deployment strategy that prioritizes both growth and shareholder value, the GuruFocus report notes. For 2025, the company forecasts 3% to 6% EPS growth in Q4 and 5% to 6% for the full year, the report says, driven by high-margin segments like electronics manufacturing, which accounts for 9% of sales, the report adds.

Despite these strengths, Linde's valuation metrics suggest it is trading at a discount relative to sector benchmarks. As of October 11, 2025, Linde's P/E ratio stood at 29.84, according to a GuruFocus report, while its EV/EBITDA ratio was 17.96, according to a ValueInvesting.io valuation page. For context, the ThermoSafe divestiture by Sonoco Products in 2025 was valued at 13x EV/EBITDA, according to a Marketscreener report, a figure that could serve as a proxy for industrial sector valuations. Linde's EV/EBITDA of 17.96, according to the ValueInvesting.io page, appears elevated compared to this benchmark, but this discrepancy may reflect its unique position in the industrial gas sector. With a 73.38% market share in the chemical manufacturing industry, according to a CSIMarket report, Linde's dominance and recurring revenue streams justify a premium valuation.

Linde's undervaluation is further supported by its institutional ownership dynamics. Institutional investors hold 82.80% of Linde's stock, with entities like Rathbones Group PLC increasing their stakes by 8.7% in Q2 2025, according to the GuruFocus report. This confidence in Linde's long-term prospects contrasts with its current valuation multiples, suggesting a potential re-rating as the market recognizes its earnings acceleration and strategic positioning.

The industrial sector's stabilization creates a fertile ground for Linde's re-rating. As demand rebounds and supply pipelines normalize, Linde's focus on high-growth areas like clean hydrogen and carbon capture will likely drive margin expansion, according to a Linde press release. Meanwhile, its disciplined capital allocation and strong cash flow generation provide a buffer against macroeconomic headwinds, particularly in Europe, where manufacturing activity remains soft, according to the GuruFocus report.

In conclusion, Linde PLC represents a compelling investment opportunity in a stabilizing industrial sector. Its earnings acceleration, strategic alignment with energy transition trends, and undervaluation relative to peers position it for a re-rating. For investors seeking quality growth at a discount, Linde's combination of operational strength and forward-looking innovation makes it a standout name.