Investing.com — Shares of Air Products (NYSE:) & Chemicals rose more than 7% on Monday on reports that activist investor Mantle Ridge has built a stake in the company worth more than $1 billion and plans to push for strategic changes.

According to The Wall Street Journal, Mantle Ridge, led by Paul Hilal, intends to focus on succession planning for longtime CEO Seifi Ghasemi and refining the company’s capital allocation and strategy.

Mantle Ridge reports Air Products is trading at a discount to its peers despite its mighty position in the industrial gases and immaculate hydrogen sectors.

Wall Street analysts reacted positively to the news. Evercore ISI upgraded the company’s shares to Outperform, raising their price target from $305 to $365.

“The FY25 bridge looks safer than expected. It’s nice to have an activist and this is what we’ve been waiting for,” the company said, emphasizing that Mantle Ridge’s involvement could result in better capital allocation and risk management.

Citi also weighed in, emphasizing that activist pressure could unlock shareholder value, especially since Air Products’ underperformance compared to peers Linde (NYSE:) and Air Liquide (OTC:) is not fully explained by market conditions.

Citi raised its price target on APD to $345 and placed a 90-day positive catalytic watch on the stock, suggesting that further transparency around CEO succession and pipeline disclosures could improve investor sentiment.

Jefferies agreed with this optimism, upgrading Air Products to Buy from Hold and raising its price target to $364. The company believes it could return to its core industrial gases business, moving away from more speculative energy transition projects.

“In our view, activist participation would give Air Products a chance to both shift its narrative to ‘quality growth’ and, at least for the time being, tie shareholder returns to company initiatives rather than policy changes and the prospects for gains in commodity spreads,” Jefferies wrote .