RBC Capital analyst Arun Viswanathan has adjusted his outlook on DuPont (DD, Financial), lowering the price target from $101 to $90. Despite this revision, the analyst maintains an Outperform rating on the company's shares.
The decision to revise the price target reflects a broader trend of declining market valuations. However, Viswanathan sees the recent dip in DuPont's stock, attributed to U.S./China tariff impacts, as a potential buying opportunity. This perspective is bolstered by anticipated improvements and growth in DuPont's Water & Protection and electronics segments.
Additionally, the company is expected to benefit from upcoming strategic developments, including the spin-off of its electronics unit and potential asset sales in its Aramids business. These initiatives are seen as potential catalysts that could enhance DuPont's future performance and value.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 15 analysts, the average target price for DuPont de Nemours Inc (DD, Financial) is $87.82 with a high estimate of $116.00 and a low estimate of $74.00. The average target implies an upside of 39.27% from the current price of $63.06. More detailed estimate data can be found on the DuPont de Nemours Inc (DD) Forecast page.
Based on the consensus recommendation from 19 brokerage firms, DuPont de Nemours Inc's (DD, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for DuPont de Nemours Inc (DD, Financial) in one year is $85.22, suggesting a upside of 35.14% from the current price of $63.06. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the DuPont de Nemours Inc (DD) Summary page.
DD Key Business Developments
Release Date: February 11, 2025
- Revenue: Net sales of $3.1 billion, a 7% increase year-over-year.
- Operating EBITDA: $807 million, up 13% year-over-year.
- Operating EBITDA Margin: 26.1%, an increase of 140 basis points.
- Adjusted EPS: $1.13, a 30% increase from the prior year.
- Free Cash Flow: Transaction-adjusted free cash flow of $455 million with a conversion rate of 96% for the quarter.
- Volume Growth: 8% increase in volume, offset by a 1% decrease in price.
- Regional Performance: Asia Pacific organic sales growth of 11%, North America up 5%, and Europe up 1%.
- E&I Segment Sales: $1.5 billion, an 11% increase year-over-year.
- W&P Segment Sales: $1.4 billion, a 6% increase year-over-year.
- Cash Flow from Operations: $564 million for the quarter.
- Capital Expenditures: $161 million for the quarter.
- 2025 Guidance: Estimated net sales of $12.8 billion to $12.9 billion, operating EBITDA of $3.325 billion to $3.375 billion, and adjusted EPS of $4.30 to $4.40.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- DuPont de Nemours Inc (DD, Financial) reported a 7% increase in fourth-quarter sales, with double-digit organic growth in Electronics & Industrial (E&I) and a 6% growth in Water & Protection (W&T).
- Operating EBITDA increased by 13% year-over-year, reaching $807 million, with a margin expansion of 140 basis points.
- Adjusted EPS grew by 30% from the previous year, driven by improved segment earnings and a reduced share count.
- The company achieved a strong cash flow conversion rate of 105%, supported by working capital optimization.
- DuPont de Nemours Inc (DD) is targeting mid-single-digit organic sales growth for 2025, with a focus on operational execution and portfolio management, including the planned spin-off of its Electronics business.
Negative Points
- The company experienced a 1% decrease in price, which slightly offset the 8% increase in volume for the fourth quarter.
- There is an anticipated 1% price headwind for 2025, which could impact margins despite expected absorption tailwinds.
- DuPont de Nemours Inc (DD) is facing a $700 million cost related to the separation of its Electronics business, which will impact cash deployment in the near term.
- The company expects a 1% higher tax rate in 2025, which will contribute to a $0.10 headwind in EPS.
- The Industrial Solutions segment experienced a decline in organic sales by 7% compared to the previous year.
