DuPont de Nemours is an American industrial conglomerate specializing in the production of chemical products and materials. The company's laboratories have developed Teflon, Kevlar, Lycra, and numerous other materials. DuPont's stock has underperformed the market in recent years, but this situation may change in the future, driven by the company's planned reorganization. The fair value of DuPont's shares is $90.9, with an upside of 10.7%. The dividend yield stands at 1.85%.
Investment Thesis
🔼 Company Reorganization. At the end of May, DuPont announced plans to split into three companies. The first, New DuPont, will focus on producing materials for the medical, industrial, construction, and automotive sectors. Revenue from this segment in 2023 was approximately $6.6 bln. The second company will serve the semiconductor industry (revenue $4 bln), while the third will be dedicated to water filtration and purification industries (revenue $1.5 bln). This split will allow the company to focus on specific areas and increase profitability. A successful example of such a split is General Electric. In 2021, the market capitalization of the unified company was $100 bln, while the combined value of the three resulting companies is currently $260 bln.
🔼 Positive Market Assessment. Analysts have an optimistic outlook on the company's future. Over the past three months, there have been 13 positive revisions for revenue forecasts and the same number for earnings per share (EPS) forecasts. In contrast, there was only 1 negative revision for revenue and 2 for EPS.
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