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DowDuPont Agriculture Unit, Monsanto Land Insect Control Deal

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DowDuPont Inc.’s Agricultural unit, Corteva Agriscience and Monsanto Company   completed a licensing deal for next generation technology for insect control in corn for the United States and Canada. The terms of the agreement have been kept under wraps.

Under the agreement, Corteva Agrisciences will get a license to integrate Monsanto's Corn Rootworm III and MON89034 traits with the former’s insect control traits. The deal allows the development of a next generation of insect control technology that will be offered with the Enlist herbicide tolerant trait for corn. The combined product will be broad spectrum with multiple modes of action for above and below ground pests.  

Also, it will provide more options to the farmers fighting corn rootworm that causes crop damage and extend the durability of industry-leading insect trait technology.

DowDuPont has underperformed the industry it belongs to over the past three months. The company’s shares have lost around 5.3% over this period, compared with roughly 1.6% decline recorded by the industry.

 


 

The company, during its first-quarter 2018 call, noted that it has realized cost-synergy savings of more than $300 million in the first quarter and is on track to deliver a 75% run rate against its $3.3-billion cost synergy target by the end of third-quarter 2018. It also returned around $2 billion to shareholders in the first quarter through dividends and share repurchases.

DowDuPont expects net sales in the second quarter to increase more than 10% and operating EBITDA to rise more than 20% on a year-over-year basis.

DowDuPont remains committed to achieve the cost-synergy target, execute its growth projects and deliver new products from its innovation pipeline. The company also expects the Materials Science business spin-off to complete by the end of first-quarter 2019 followed by the separation of Agriculture and Specialty Products businesses by Jun 1, 2019.

Zacks Rank & Stocks to Consider

DowDuPont is a Zacks Rank #3 (Hold) stock.

Some better-ranked companies in the basic materials space worth considering are FMC Corporation (FMC - Free Report) and Huntsman Corporation (HUN - Free Report) . Both the stocks sport a Zacks Rank #1 (Strong Buy).  You can see the complete list of today’s Zacks #1 Rank stocks here.

FMC Corp has an expected long-term earnings growth rate of 13.6%.  Its shares have gained around 24.3% over a year.

Huntsman has an expected long-term earnings growth rate of 8.3%.  Its shares have moved up around 21% over a year.

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