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DuPont (DD) Shares Pop 60% in 3 Months: What's Driving It?

Zacks Equity Research
·4-min read

DuPont de Nemours, Inc.’s DD shares have surged 59.7% over the past three months. The company has also topped its industry’s rise of 33.1% over the same time frame.

The company has a market cap of roughly $41.2 billion and average volume of shares traded in the last three months is around 7,103.4K.


 

Let’s take a look into the factors that are driving this Zacks Rank #3 (Hold) stock.

What’s Going in DuPont’s Favor?

Forecast-topping earnings performance in the first quarter of 2020 and upbeat prospects have contributed to the gain in the company’s shares. DuPont’s adjusted earnings for the first quarter of 84 cents per share beat the Zacks Consensus Estimate of 83 cents.

The company, on its first-quarter call, said that it is witnessing strength across personal protection, water filtration, food and beverage, electronics and probiotics markets. It is taking actions to improve its cost structure, strengthen its liquidity and optimize working capital amid the coronavirus-induced crisis.

DuPont remains focused on driving growth though innovation and new product development. New product launches are driving growth in automotive electrification and water solutions. The company’s innovation-driven investment is focused on several high-growth areas. It remains committed to drive returns from its R&D investment. The company plans to invest roughly $900 million in R&D in 2020.

The company is also benefiting from cost synergy savings and productivity improvement actions. DuPont now sees roughly $180 million of savings in 2020 from its earlier announced incremental cost actions, up from its prior expectation of $90 million. The company’s cost and productivity initiatives are expected to drive margin expansion.

The company also remains focused on driving cash flow and shareholder value. It looks to boost cash flow through working capital productivity and earnings growth. The company is taking actions to deliver more than $500 million of working capital improvement in 2020. It is also deferring certain capital expenditures to boost free cash flow. DuPont also expects to return roughly $900 million in dividends and $230 million in share repurchases this year.

During the first quarter, the company also strengthened its liquidity position with a $1 billion revolving credit facility. The company ended the first quarter with a strong cash position of $1,748 million. With these and $1.3 billion in available commercial paper, the company has roughly $4 billion of total available liquidity.

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DuPont de Nemours, Inc. Price and Consensus

 

DuPont de Nemours, Inc. Price and Consensus
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 in the basic materials space are Agnico Eagle Mines Limited AEM, Barrick Gold Corporation GOLD and Franco-Nevada Corporation FNV.

Agnico Eagle has a projected earnings growth rate of 74.2% for the current year. The company’s shares have gained roughly 27% in a year. It currently carries a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Barrick Gold has a projected earnings growth rate of 64.7% for the current year. The company’s shares have shot up around 73% in a year. It currently has a Zacks Rank #2 (Buy).

Franco-Nevada has a projected earnings growth rate of 19.2% for the current year. The company’s shares have surged around 68% in a year. It currently has a Zacks Rank #2.

5 Stocks Set to Double

Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.

Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

Today, See These 5 Potential Home Runs >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
DuPont de Nemours, Inc. (DD) : Free Stock Analysis Report
 
FrancoNevada Corporation (FNV) : Free Stock Analysis Report
 
Barrick Gold Corporation (GOLD) : Free Stock Analysis Report
 
Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
 
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Zacks Investment Research