DuPont Worth Considering Now, Driven By Nelson Peltz's Investor Activism
- Nelson Peltz's investor activism can drive DuPont to make changes to improve performance.
- Management at DuPont will try to take the steam out of Peltz's demands by doing some of them as if on their own initiative.
- Investors have an opportunity for attractive share price gains even if Peltz doesn't achieve all of his demands.
- DuPont’s Environmental, Social and Governance (ESG) Disclosure is lower than its top peers.
- However, DuPont's key GHG and water metrics show continuing improvement for the past five years.
- Taken together, DuPont's ESG metrics suggest that the company works to continuously improve operational and process efficiencies in its enterprise.
Update: DuPont's Spin-Off One Step Closer As Company Transforms Towards Possible Acquisitions
- The company’s spin-off of their titanium dioxide, fluoroproducts and chemical solutions business remains on track for a mid-2015 spin-off.
- The company’s transformation will allow them to focus on agriculture, nutrition, industrial biosciences, and advanced materials and save $1 billion.
- The company’s spin off of their performance chemicals division will further their gradual transformation to high-growth, less cyclical businesses.
- The company’s transformation and cost savings will allow them to pursue strategic acquisitions, such as FMC Corporation.
- We did anticipate the timing of the spin-off as the company had indicated such timing well in advance.
DuPont Shares Appear Overvalued By 30% - Investors Should Be Cautious
- Shares of DuPont trade at 15 times forward earnings, the highest multiple the firm has seen over the last five years.
- The firm's return on invested capital has declined recently, but it still compares favorably with other large cap chemical companies.
- With future earnings growth expected to accelerate but remain in single digits, the company's fundamentals are not strong enough to warrant its current valuation.
- DuPont's history of earnings volatility make it difficult to forecast EPS.
- I think estimates going forward are too high and that EPS growth should be discounted by investors because of DuPont's extreme earnings volatility.
- DuPont is worth about $70 right now, making it fairly valued.
- I think there are better places for your money right now despite the dividend.
DuPont: Chemical Companies Under Fire From Activists
- A couple of the biggest chemical companies are facing activist pressure.
- Nelson Peltz has taken his fight against DuPont to the public domain.
- He’s pushing for a breakup, but the company won’t go lightly.
- E.I. Dupont De Nemours & Co. (DD) is a 36B manufacturer of agricultural products, photovoltaics and consumer electronics such as TiO2, refrigerants, protection products and construction.
- Our grade shows a reflection of the company’s financial strength, economic moat, management ability and dividend/buyback trends - and indicated theres more to the story.
- DuPont provides potential for investors in the long-term as agricultural business should have improved performance, benefits from streamline are realized and the global recovery boosts earnings.
DuPont Likely To Take Over FMC Corp. In The Intermediate Term
- DuPont is in transformation as it remains focused on agriculture, nutrition, industrial biosciences, and advanced materials.
- DD will spin off its performance chemicals division in mid-2015 as it gradually alters its focus to high-growth, less cyclical businesses.
- FMC Corporation, also in transition, has businesses exposed to favorable secular growth trends in agriculture, lithium use in electronic-vehicle manufacturing), and an aging population favoring their health and nutrition products.
- With DuPont remaining focused on agriculture, nutrition, industrial biosciences, and advanced materials, the transforming FMC appears to be an attractive takeover candidate.
- DuPont is not your grandfather's chemical company anymore.
- Cash flow is weakening, earnings are modest, and the dividend doesn't pay you enough for the risk.
- DuPont is vastly overpriced. Sell it now and replace it with Dow Chemical.
- DD has not been growing rapidly.
- But the multiple is 18x.
- On the surface it looks rich.
Upstart Argex Titanium And DuPont Headline World TiO2 Summit
- Titanium Dioxide (TiO2) is an $18 billion specialty chemical industry.
- DuPont is the world’s largest producer but is exiting (spinning off) the business.
- Start-up Argex Titanium has developed an innovative, proprietary technology which cuts TiO2 production costs by up to 50%.
- The TiO2 industry is taking Argex seriously – investors should also –.
- The last of 19 million overhanging warrants expire Monday September 29th.
DuPont: Should You Take Your Chips Off The Table Or Stay Invested?
- Chemical business DuPont is under pressure from an activist investor to break itself up.
- Nelson Peltz and his fund push for change and criticize DuPont's recent performance.
- Activist involvement has been a major catalyst for DuPont's stock price so far.
- Will we see new 52-week highs?
- Analysts are expecting DuPont to grow in the 7-8% range over the intermediate-term.
- Using a bit of caution, a 6% growth expectation would result in 5-year total annualized return expectation around 6% as well.
- More importantly, this article provides two tables that allow the readers to come to their on conclusions.
Dupont Nice But Boring, While Eastman Chemicals Provides Twice The Return On Cash
- Du Pont fairly priced; defensive, but nothing exciting.
- Eastman Chemicals is more resilient in its product range, as it is supplying other agrochemical producers.
- Since they are about equal in terms of yield, it comes down to ROA; Eastman is cheaper, and hence the better alternative.
High-Yielding DuPont Is Having A Hard Time Making Upward Traction
- The stock continues to be undervalued based on 2015 earnings estimates, but those estimates have decreased in the past few months.
- I calculate a pretty good reward/risk ratio, but the momentum seems to be heading in the wrong direction for that situation.
- Management continues to try and create shareholder value by selling off the majority stake in a JV the company owned.
- DuPont reported its second quarter results. It declared EPS of $1.17 reflecting a decrease of 9 percent compared to the figure reported in the second quarter of 2013.
- The company also re-affirmed its full year EPS outlook that is expected to be in the range of $4.00-$4.10 per share.
- The agriculture segment constitutes a major share of total revenues at 37 percent and is also expected to improve its performance.
- The performance chemicals separation is on track and is expected to be completed by the middle of 2015.
DuPont Second Quarter Earnings Wither With Lower Corn Seed Volumes
- Sales and earnings decreased from the prior year.
- The decrease in earnings and sales were in-line with what the company announced in late June.
- On the bright side, the company decided to increase the dividend by 4.4%.
- DuPont shares have moved lower after the company lowered its second-quarter earnings guidance.
- DuPont has been engaged in active discussions with activist investor Nelson Peltz.
- DuPont is trading at a reasonable valuation.
- DuPont recently announced a $5 billion buyback plan.
Jul. 21, 2014, 5:30 PM
Jun. 27, 2014, 8:16 AM
- DuPont (DD) -3.1% premarket after cutting its Q2 and FY 2014 earnings outlook, pointing to slower than expected sales growth in its agriculture and performance chemicals units.
- DD said in a conference call that it expects Q2 operating earnings in its agriculture business to fall in the low teens in percentage terms, with corn pricing in North America expected to be slightly lower than its previous estimate and returns of unused corn seeds in Brazil to be higher than anticipated.
- Dow Chemical (DOW) -0.7% premarket; chemical peers FMC, SYT, MON, LYB, CE and HUN also will be on watch today.
Jun. 26, 2014, 5:34 PM
Jun. 26, 2014, 4:19 PM
- Noting lower-than-expected results from its Agriculture and, to a lesser extent. Performance Chemicals segments, Dupont (DD) expects Q2 operating earnings to be moderately below last year's $1.28 per share, and cuts its full-year 2014 outlook to $4.00-$4.10 per share.
- In agriculture, it's all about corn, with lower-than-hoped seed sales and higher-than-planned seed inventory write-downs. Bean sales volumes are doing better-than-expected, but not enough to offset corn. CEO Ellen Kullman: "While 2014 is a transition year in agriculture, the revisions to the outlook we made today do not meet the expectations we set for our Agriculture segment or for the company."
- Updating on the company's redesign initiative, Dupont expects to book a Q2 restructuring charge of $270M, or $0.20 per share, after-tax. The efforts are expected to lead to at least $1B of cost savings by 2019.
- Shares -2.5% AH
- CC at 5 ET
- Source: Press Release
Jun. 18, 2014, 9:06 AM| 6 Comments
Jun. 17, 2014, 11:00 AM
May. 21, 2014, 3:06 PM
- DuPont (DD +0.9%) is considering alternatives to a planned spinoff of its performance chemicals unit, including a Reverse Morris Trust that could create synergies with a potential partner, CFO Nicholas Fanandakis says.
- The CFO’s comments increase the chances DuPont will enter into a Reverse Morris Trust with Tronox (TROX +6%), combining the companies’ titanium dioxide assets, Alembic Global analyst Hassan Ahmed says, calculating that such a deal would almost triple the value of TROX’s net operating losses - which can be applied toward tax obligations - to $1.6B.
Apr. 23, 2014, 9:06 AM| Comment!
Apr. 17, 2014, 8:49 AM
- DuPont's (DD) -0.7% premarket as Q1 earnings plummet by more than half from the year-ago quarter after losing the one-time boost from the sale of its coating business.
- DuPont estimates adverse winter weather reduced Q1 EPS by $0.07 due to increased operating costs and lost sales.
- Sales in DD's agricultural business fell 6% to $4.39B, as volume growth in the Americas was constrained by the harsh weather as well as shifts in the timing and planted area.
- However, volumes increased in the company's industrial segments and margins improved in almost all of them.
- Reaffirms guidance for FY 2014, sees EPS of $4.20-$4.45 vs. $3.88 last year and $4.32 analyst consensus, based on anticipated growth in global industrial market demand.
Apr. 17, 2014, 6:01 AM| 4 Comments
Apr. 17, 2014, 12:05 AM
Apr. 16, 2014, 5:30 PM
Apr. 11, 2014, 6:06 PM
- China’s rejection of genetically modified corn is becoming a big problem for exporters: In the first full tally of the impact, a U.S. grain industry group says the rejected shipments have totaled ~1.45M metric tons, far more than the 545K tons China has reported and the 900K tons that has circulated in news media.
- The rejected shipments have cost grain companies $427M from lost sales and reduced prices for China-bound shipments that must be resold elsewhere, and has affected the price of corn and soybeans, resulting in hundreds of millions of dollars in losses for farmers.
- Big seed companies such as Syngenta (SYT), Monsanto (MON) and DuPont (DD) generally are aligned with traders such as Cargill and ADM in the desire to grow and sell as much grain as possible, but now the two groups are debating who should bear the costs for the rejected shipments.
- ETFs: DBA, CORN, RJA, SOYB, DAG, JJA, RGRA, AGA, AGF, USAG, FUD, UAG, DIRT, TAGS, ADZ
Apr. 3, 2014, 11:39 AM
- A U.S. appeals court throws out a $920M award to DuPont (DD -0.1%) over a case involving alleged theft of trade secrets in the manufacture of Kevlar, citing errors by the trial judge in the case brought in 2012 by federal prosecutors.
- The court orders a new trial, ruling that the judge in the case had wrongly excluded evidence relevant to the defense, and for a new judge to be assigned to the case.
Mar. 19, 2014, 6:49 PM
- Fear of fickle regulators is discouraging companies from investing in climate-change initiatives: Companies invested on average 22% less in emissions reductions in 2013 than in the prior year, as 90% of companies responding to a recent survey cited regulatory risk as a barrier to investment.
- DuPont (DD), for example, says regulatory surprises mean it is facing the prospect of smaller markets and longer payback periods than originally anticipated on two projects in the U.S. and Europe.
- "If you do a longer term investment in the industry, it takes years to build a full scale plant," a frustrated DuPont exec tells WSJ. "You want to have a payback. We can’t put hundreds of millions of dollars in a full-scale plant then see the law change and there is no market any more.”
Mar. 10, 2014, 6:05 PM
- DuPont (DD) -1% AH after saying in an 8-K filing that Q1 sales and earnings will be “challenged” by the unusually cold North American winter and disruptions in Ukraine.
- However, DD maintains its FY 2014 forecast for operating EPS of $4.20-$4.45, citing an improvement in global industrial production and lower agriculture input costs; consensus analyst estimate is $4.43.
DD vs. ETF Alternatives
E.I. du Pont de Nemours & Company is a science and engineering company that offers products and patents applications for agriculture, nutrition, electronics and communications, safety and protection, home and construction, transportation and apparel.
Other News & PR