Yahoo Finance Why You Should Retain DuPont (DD) Stock in Your Portfolio
DuPont de Nemours, Inc. DD is benefiting from healthy demand in a number of markets, productivity and pricing actions and innovation-driven investment amid headwinds from slowdown across certain markets and higher raw material and energy costs.
The company’s shares are up 3% over a year, compared with the 7.1% decline of its industry.
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Let’s find out why this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
Productivity and Innovation to Aid Results
DuPont 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, earlier this 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.
Moreover, DuPont is gaining from healthy underlying demand in several 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.
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. DuPont completed the divestment of the majority of its Mobility & Materials unit to Celanese on Nov 1, 2022 as part of its ongoing transformation. The company received $11 billion in gross cash from the transaction. The move is expected to boost its underlying performance, strengthen its balance sheet, maximize shareholders’ return and provide opportunities to grow business through targeted mergers and acquisitions.
Weakness in Electronics & Semiconductor Ails
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 AngloGold Ashanti Limited AU, L.B. Foster Company FSTR and Linde plc LIN.
AngloGold Ashanti currently carries a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for AU’s current-year earnings has been revised 22% upward in the past 60 days. You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for current-year earnings for AU is currently pegged at $1.94, reflecting an expected year-over-year growth of 50.4%. AngloGold Ashanti’s shares have popped roughly 36% in the past year.
L.B. Foster currently carries a Zacks Rank #1. The Zacks Consensus Estimate for FSTR's current-year earnings has been stable over the past 60 days.
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.
Linde currently carries a Zacks Rank #2. The Zacks Consensus Estimate for LIN’s current-year earnings has been revised 3.8% 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 12% in the past year.
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DuPont de Nemours, Inc. (DD) : Free Stock Analysis Report
AngloGold Ashanti Limited (AU) : Free Stock Analysis Report
L.B. Foster Company (FSTR) : Free Stock Analysis Report
Linde PLC (LIN) : Free Stock Analysis Report
