DuPont, Eastman among five chemical companies cut at Jefferies

Jun. 16, 2022 12:36 PM ETDuPont de Nemours, Inc. (DD), EMN, CEMMM, APD, TSE, MEOH, LYB, LIN, DOW, DSEY, IFF, MX:CABy: Carl Surran, SA News Editor5 Comments

The Celanese corporation plant in Lanaken, Belgium. This corporation is a global chemica

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DuPont (NYSE:DD), Eastman Chemical (NYSE:EMN), Celanese (NYSE:CE) and International Flavors & Fragrances (IFF) all fall to 52-week lows in Thursday's trading as Jefferies downgraded shares to Hold from Buy, saying the chemical group's risk/reward profiles no longer look attractive in an environment of higher interest rates.

Jefferies also cut Diversey (DSEY) to Hold, while maintaining Buy ratings for Dow Inc. (DOW), Linde (LIN), LyondellBasell (LYB), Methanex (MEOH) and Trinseo (TSE) and keeping Hold ratings for Air Products (APD) and 3M (MMM).

The five stocks downgraded by Jefferies all trade sharply lower near midday: (DSEY) -9.1%, (CE) -8.4%, (EMN) -7.3%, (DD) -6.3%, (IFF) -4.6%.

The firm slashed price targets for the five: (CE) target to $114 from $200, (DSEY) to $10 from $12, (EMN) to $87 from $150, (DD) to $60 from $92, (IFF) to $101 from $170.

It is "time to discount a slowdown and the next new normal," analyst Laurence Alexander writes, with the next few quarters "looking particularly difficult for companies with financial leverage ratios well above the sector average... or that could face persistent margin pressure as cyclical end-markets decelerate."

DuPont (DD) is significantly undervalued, and its "upside is now very significant and very much worth considering," Wolf Report writes in a bullish analysis posted recently on Seeking Alpha.

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