Dow Crosses All Federal Regulatory Barriers To The Commercialization Of Enlist

The Dow Chemical Company (NYSE:DOW) recently announced that the U.S. Environmental Protection Agency (EPA) has granted a final approval to its Enlist Duo herbicide. The approval came under a month after the company received a final approval from the U.S. Department of Agriculture (USDA) to commercialize its ‘Enlist’ labeled corn and soybean seeds. These seeds are a part of the new Enlist weed control system developed by Dow. They are genetically modified to tolerate the application of more effective herbicides, such as Enlist Duo, as weeds in the U.S. are growing increasingly resistant to the glyphosate-based herbicides most commonly used today. This herbicide contains 2,4-D that adds another mode of action to the glyphosate-based herbicides. The technology aims at providing higher crop yields through better protection against tougher weeds that are growing resistant to glyphosate. ^[1]

With the EPA’s approval of Enlist Duo, Dow has successfully crossed all federal regulatory barriers to the commercialization of its Enlist weed control system. The company expects to launch the new corn and soybean seed varieties in the U.S. next year, after a delay of almost two years. We believe that the commercialization of the Enlist weed control system could boost Dow’s market share in the robust agricultural products market significantly. (See: The Enlist Weed Control System Holds Huge Growth Potential For Dow)

Dow is a diversified chemical industry giant operating in specialty chemicals, advanced materials, agro-sciences and plastics business segments. It delivers a broad range of technology-based products and solutions to customers in approximately 160 countries, and in high growth sectors such as electronics, water, energy and agriculture. Last year, Dow reported annual sales of approximately $57 billion and earning adjusted net income of around $2.9 billion. We currently have a $53/share price estimate for Dow, which is 18.9x our 2014 full-year adjusted diluted EPS estimate of $2.80 for the company.

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1. EPA Registers Enlist Duo Herbicide, dowagro.com [↩]