Dupont’s $58 Value Supported by Investments, Better Macro Sentiment

by Trefis Team

Source: Yahoo Finance

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DuPont’s (NYSE:DD) is up about 15% over the course of the last month. The stock was supported by announcements of a new $500 million Cooper River Kevlar facility for advanced protective materials on 7th October and a new seed research facility earlier this month. [1] ((DuPont Announces New Seed Research Facility in Iowa)) Reports also emerged that DuPont is seeking to exit from Teijin Limited, a polyester-film joint venture and one that makes powder-based paint in Japan, which can fetch Dupont around $1 billion. [2] Also improving sentiment regarding the economy is helping lift its outlook.

Our current price estimate for DuPont stands at $58.45, which is about 30% above its current market price.

See our full analysis for DuPont’ Stock.

EU Debt Plan, US GDP Growth Lift Stock

One 0f the key stock drivers this week is the improving economic outlook which led to broader equity-market rally because demand for commodity and specialty chemicals is strongly dependent on healthy macro-economic conditions such as GDP and industrial growth.

European leaders have finally announced they have reached an agreement to reduce Greece’s debt in the hopes that this will stem the debt crisis. In addition, U.S. GDP growth came in stronger than expected, and both of these announcements are lifting the outlook for DuPont.

Continued Investments Support Growth

We believe that DuPont’s investment in a new Kevlar facility, which is expected to increase overall global production capacity for Kevlar by 40% in two-years will help it meet the demand for advanced protective materials in emerging industries and support increasing DuPont’s performance and safety materials market share over medium-term. [1] But, a sale of DuPont’s stake in Teijin Venture can partially offset this market share growth in near-term. [3]

Moreover, we believe that DuPont’s continued focus to leverage new research facilities for product innovation, global expansion, and supply chain management to ensure full product availability will help the company continue expanding its market share in agriculture and nutrition based products over the medium-term. [2]

You can drag the trend lines in the modifiable charts above to see the impact of these trends on DuPont’s stock value.

Understand How a Company’s Products Impact its Stock Price at Trefis.

  1. DuPont Starts Up $500 Million Kevlar® Facility in South Carolina [] []
  2. DuPont Said to Seek Buyers for Teijin Venture, Powder Paint Unit [] []
  3. ref:1 []
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