DuPont (NYSE:DD), the world’s second largest seed producer, is seeing high growth in the AgroScience division backed by strong industry fundamentals. The division was by far the best performer in 2012 among the diversified set of segments that the company operates in (Read DuPont’s Agricultural Business Offsets Weak Chemicals Performance, January 23rd, 2013). Under its Pioneer Hi-Bred flagship brand of seeds, it recently introduced its new T Series of soybeans that promises increased protection and better pest resistance through enhanced genes tailored for specific geographies. With these new varieties of soybean seeds, Dupont aims to increase its share in the global seeds market.
Apart from the agroscience division, the company operates in other segments like performance chemicals, performance materials, health and nutrition, electronics and communications, safety and protection materials and industrial biosciences.
We have a price estimate of $47 for Dupont, in-line with the current market price.
- Dupont Q4 Earnings: Company Positive On Dow Merger & Cost Saving Plan, But Weak Agro Sales And Currency Headwinds Continue To Hurt Operations
- Dupont Q3 Earnings: Weak Agro Products Sales and Currency Headwinds Hurt Operations, And Will Continue To Do So In Near Term
- DuPont 2Q: Soft Agricultural Markets and Currency Headwinds Weigh On Earnings
- DuPont: Soft Agricultural Products Market and Currency Headwinds To Weigh On 2Q Earnings
- DuPont Close To Another Transformational Milestone With Chemours Spin Off
- DuPont’s Earnings Decline On Lower Corn-Seed Sales, Stronger U.S. Dollar
DuPont Pioneer delivered strong performance in 2012
DuPont Pioneer synthesizes and sells different types of genetically modified seeds like corn, soybean, sunflower, canola, sorghum and rice mainly in the U.S. The drought conditions during summer of 2012 resulted in tough conditions for farming. DuPont’s Pioneer Aquamax corn seed brand was a hit as it provided around 8% higher yields than regular varieties of corn seeds under water-limited environments. 
Other important brands marketed by Pioneer are Acremax (refuge-in-the-bag option where insect-protected and non-insect protected seeds are available in one bag), Herculex Xtra (offers a complete spectrum of in-plant above- and below-ground insect control), and other weed control options.
New varieties of Soybean seeds launched for 2013
DuPont Pioneer announced on January 23 that its new T Series of soybeans will be available for farmers across North America to try on a limited basis this spring. The series includes 39 varieties in seven maturity groups and is the largest, single season introduction in the company’s history. The new T Series is based on Pioneer’s accelerated yield technology (AYT) that enables plant breeders to get increased protection and improved pest resistance through enhanced genes tailored for specific geographies.  We consider this an important development for the company’s prospects in the North American seeds market. The response of the farmers to the new seed varieties and their adoption will be crucial, however.
We have currently factored in a growing global corn, soybean and other seeds market share for DuPont, and we expect the market share to reach from 19.5% currently to 21.5% over our forecast period. However, If DuPont is able to strike success with these new varieties of soybean seeds in the North American growing season this year and is able to extend its share in the global seeds market to around 24.5% over the forecast period, there could be 5% upside to our current price estimate.Notes:
- DuPont Delivers Strong Product Performance for North American Farmers, November 2012, DuPont Investors [↩]
- DuPont Pioneer Introduces Soybean T Series for 2013, January 23rd 2013, AGWEB [↩]