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Why You Should Retain DuPont (DD) Stock in Your Portfolio
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DuPont de Nemours, Inc. (DD - Free Report) is gaining from its productivity and pricing actions, innovation-driven investment and the Spectrum Plastics Group acquisition amid headwinds including demand softness in certain areas.
The company’s shares are up 29.4% over a year, compared with the 1.6% rise of its industry.
Image Source: Zacks Investment Research
Let’s find out why this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
Productivity, Innovation & Spectrum Buyout 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. DD remains committed to drive returns from its R&D investment.
The company recently completed the buyout of leading manufacturer of specialty medical devices and components, Spectrum Plastics Group from AEA Investors for $1.75 billion. The acquired business, with annual sales of around $500 million, has been integrated into the industrial solutions line of business within the Electronics & Industrial segment.
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. The addition of Spectrum is expected to boost revenues in the Electronics & Industrial segment in the third quarter.
DuPont is also benefiting from cost synergy savings and productivity improvement actions. Its structural cost actions are contributing to its bottom line. It 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.
Weakness in Water Business Ails
The company’s water business faces challenges from the slowdown in China. Its water solutions business is expected to see sales moderation in the second half of 2023 due to softer demand in China resulting from the slowdown in the industrial economy.
The softness in construction end-markets is also expected to impact the shelter solutions business within the Water & Protection segment in 2023. Also, customer de-stocking in shelter solutions is expected to continue through the third quarter.
DuPont’s move to adjust production rates is also expected to impact its top line and margins. The company is taking actions to reduce production rates in electronics to align inventory with demand. Production rate reductions are expected to be a drag on sales and operating EBITDA in the third quarter of 2023.
Better-ranked stocks worth a look in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Hawkins, Inc. (HWKN - Free Report) and Akzo Nobel N.V. (AKZOY - Free Report) .
The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.48, implying year-over-year growth of 205.3%. Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a trailing four-quarter earnings surprise of roughly 10%, on average. The stock has rallied around 72% in a year.
Hawkins currently carrying a Zacks Rank #1. It has a projected earnings growth rate of 18.9% for the current year.
Hawkins has a trailing four-quarter earnings surprise of roughly 25.6%, on average. HWKN shares are up around 63% in a year.
Akzo Nobel currently carries a Zacks Rank #1. The Zacks Consensus Estimate for AKZOY's current-year earnings has been revised 2.9% upward over the past 60 days.
The Zacks Consensus Estimate for current fiscal-year earnings for Akzo Nobel is currently pegged at $1.44, implying year-over-year growth of 67.4%. AKZOY shares have gained around 22% in a year.
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Why You Should Retain DuPont (DD) Stock in Your Portfolio
DuPont de Nemours, Inc. (DD - Free Report) is gaining from its productivity and pricing actions, innovation-driven investment and the Spectrum Plastics Group acquisition amid headwinds including demand softness in certain areas.
The company’s shares are up 29.4% over a year, compared with the 1.6% rise of its industry.
Image Source: Zacks Investment Research
Let’s find out why this Zacks Rank #3 (Hold) stock is worth retaining at the moment.
Productivity, Innovation & Spectrum Buyout 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. DD remains committed to drive returns from its R&D investment.
The company recently completed the buyout of leading manufacturer of specialty medical devices and components, Spectrum Plastics Group from AEA Investors for $1.75 billion. The acquired business, with annual sales of around $500 million, has been integrated into the industrial solutions line of business within the Electronics & Industrial segment.
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. The addition of Spectrum is expected to boost revenues in the Electronics & Industrial segment in the third quarter.
DuPont is also benefiting from cost synergy savings and productivity improvement actions. Its structural cost actions are contributing to its bottom line. It 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.
Weakness in Water Business Ails
The company’s water business faces challenges from the slowdown in China. Its water solutions business is expected to see sales moderation in the second half of 2023 due to softer demand in China resulting from the slowdown in the industrial economy.
The softness in construction end-markets is also expected to impact the shelter solutions business within the Water & Protection segment in 2023. Also, customer de-stocking in shelter solutions is expected to continue through the third quarter.
DuPont’s move to adjust production rates is also expected to impact its top line and margins. The company is taking actions to reduce production rates in electronics to align inventory with demand. Production rate reductions are expected to be a drag on sales and operating EBITDA in the third quarter of 2023.
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 a look in the basic materials space include Carpenter Technology Corporation (CRS - Free Report) , Hawkins, Inc. (HWKN - Free Report) and Akzo Nobel N.V. (AKZOY - Free Report) .
The Zacks Consensus Estimate for current fiscal-year earnings for CRS is currently pegged at $3.48, implying year-over-year growth of 205.3%. Carpenter Technology currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Carpenter Technology has a trailing four-quarter earnings surprise of roughly 10%, on average. The stock has rallied around 72% in a year.
Hawkins currently carrying a Zacks Rank #1. It has a projected earnings growth rate of 18.9% for the current year.
Hawkins has a trailing four-quarter earnings surprise of roughly 25.6%, on average. HWKN shares are up around 63% in a year.
Akzo Nobel currently carries a Zacks Rank #1. The Zacks Consensus Estimate for AKZOY's current-year earnings has been revised 2.9% upward over the past 60 days.
The Zacks Consensus Estimate for current fiscal-year earnings for Akzo Nobel is currently pegged at $1.44, implying year-over-year growth of 67.4%. AKZOY shares have gained around 22% in a year.