Yahoo Finance DuPont (DD) Gains on Productivity & Innovation, Destocking Ails
DuPont de Nemours, Inc. DD is benefiting from healthy demand in several markets, productivity and pricing actions and innovation-driven investment amid headwinds from destocking in consumer electronics and raw material cost inflation.
The company’s shares are up 5.3% over a year, compared with the 10.3% decline of its industry.
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DuPont, a Zacks Rank #3 (Hold) stock, is gaining from healthy underlying demand in a number of end-markets, including water and general industrial. Its industrial solutions business and the Water & Protection segment recorded growth in organic sales in the first quarter. DuPont also witnessed continued strong demand in its automotive adhesives portfolio in the quarter. It envisions sustained strength in water, automotive, aerospace and healthcare in the remainder of 2023.
Moreover, the company remains focused on driving growth though innovation and new product development. Its innovation-driven investment is focused on several high-growth areas. It remains committed to drive returns from its R&D investment. It is also benefiting from cost synergy savings and productivity improvement actions. Its structural cost actions are contributing to its bottom line.
The company, last month, also agreed to buy leading manufacturer of specialty medical devices and components, Spectrum Plastics Group from AEA Investors for $1.75 billion. The transaction is expected to complete by the end of third-quarter 2023. The acquisition strengthens DuPont’s existing position in stable and fast-growing healthcare end-markets. It is also in sync with its focus on high-growth, customer-driven innovation for the healthcare market.
DuPont also continues to implement strategic price increases in the wake of raw material and energy cost inflation. These actions are likely to support its results in 2023. The company is also managing its portfolio with an aim for value creation. It is divesting non-core assets to focus more on high-growth, high-margin businesses.
However, DuPont faces challenges from the slowdown in the consumer electronics and semiconductor markets. The company saw lower sales in semiconductor technologies and challenges in the electronics and construction-related end markets in the first quarter. It witnessed lower volumes in consumer electronics and semiconductors in the quarter. Reduced consumer electronics spending and inventory destocking are impacting volumes. Lower semiconductor fab utilization rates are also hurting sales in the semiconductor technologies business. DD sees weakness in electronics and channel inventory destocking in the near term. This may impact its performance in the second quarter.
The company is also exposed to headwinds from higher raw material and logistics costs. Supply constraints for major raw materials are expected to continue over the near term. Higher energy costs driven by the Russia-Ukraine conflict are also expected to impact its results.
DuPont de Nemours, Inc. Price and Consensus
DuPont de Nemours, Inc. price-consensus-chart | DuPont de Nemours, Inc. Quote
Stocks to Consider
Better-ranked stocks worth considering in the basic materials space include L.B. Foster Company FSTR, Gold Fields Limited GFI, and Linde plc LIN.
L.B. Foster currently carries a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for FSTR's current-year earnings has been stable over the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
L.B. Foster’s earnings beat the Zacks Consensus Estimate in each of the last four quarters. It has a trailing four-quarter earnings surprise of roughly 140.5%, on average. FSTR has gained around 5% in a year.
Gold Fields currently carries a Zacks Rank #2 (Buy). The Zacks Consensus Estimate for GFI’s current-year earnings has been revised 23.5% upward in the past 60 days.
The consensus estimate for current-year earnings for GFI is currently pegged at $1.05, reflecting an expected year-over-year growth of 8.3%. Gold Fields’ shares have popped roughly 64% in the past year.
Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 4.4% upward in the past 60 days.
Linde beat Zacks Consensus Estimate in each of the last four quarters. It delivered a trailing four-quarter earnings surprise of 6.9% on average. LIN’s shares have gained roughly 8% in the past year.
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DuPont de Nemours, Inc. (DD) : Free Stock Analysis Report
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Linde PLC (LIN) : Free Stock Analysis Report
