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DowDuPont today announced the successful completion of the merger of equals between The Dow Chemical Company and E.I. du Pont de Nemours & Company, effective Aug. 31, 2017.
DuPont de Nemours, Inc. (DD): Price and Financial Metrics
DuPont offers engineering polymers, packaging and industrial polymers, films, elastomers, parts, and systems and solutions for the automotive original equipment manufacturers and associated aftermarket industries, as well as electrical, electronics, packaging, construction, oil, photovoltaics, aerospace, chemical processing, and consumer durable goods. The company was founded in 1802 and is based in Wilmington, Delaware.
DD Price Forecast Based on DCF Valuation
DCF Fair Value Target:
We started the process of determining a valid price forecast for DuPont de Nemours Inc with a discounted cash flow analysis -- the results of which can be found in the table below. To summarize, we found that DuPont de Nemours Inc ranked in the 14th percentile in terms of potential gain offered. We should note, though, that the most conservative analysis suggests this stock will yield negative results -- and thus may be a potential short opportunity. The most interesting components of our discounted cash flow analysis for DuPont de Nemours Inc ended up being:
Its compound free cash flow growth rate, as measured over the past 5.72 years, is -0.06% -- higher than only 17.56% of stocks in our DCF forecasting set.
DuPont de Nemours Inc's interest coverage rate -- a measure of gross earnings relative to interest payments -- comes in at -2.88. This coverage rate is greater than that of merely 16.04% of stocks we're observing for the purpose of forecasting via discounted cash flows.
As a business, DuPont de Nemours Inc experienced a tax rate of about 0% over the past twelve months; relative to its sector (Basic Materials), this tax rate is higher than merely 0% of stocks generating free cash flow.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
IPI, KGC, SQM, STLD, and WDFC can be thought of as valuation peers to DD, in the sense that they are in the Basic Materials sector and have a similar price forecast based on DCF valuation.
It bears repeating that the U.S. and global economies slowed significantly in the second quarter of 2020 due to coronavirus pandemic shutdowns and closures. While basic materials company Celanese Corporation (CE) experienced a big demand drop--for instance in goods supplied for elective surgeries--it and other chemicals companies fared better than...
Laura Starks on Seeking Alpha | September 27, 2020
DuPont ([[DD]] +0.2%) says it completed a sale of its business that makes trichlorosilane, the primary raw material used in producing ultra-pure polysilicon, and its equity interest in the Hemlock Semiconductor joint venture for $725M.According to Bloomberg, KeyBanc analyst Aleksey Yefremov says the sale to Hemlock shows management's commitment to...