DuPont de Nemours to Continue Unlocking Shareholder Value by Optimizing Portfolio, RBC Capital Says
03:51 PM EST, 02/05/2021 (MT Newswires) -- DuPont de Nemours (DD) will continue to deliver shareholder value through portfolio optimization and divestment of non-core businesses, RBC Capital Markets said in a note to investors on Friday, referring to DuPont's spinoff of Nutrition & Biosciences to International Flavors & Fragrances (IFF) and restructuring of its portfolio.
"Following the successful N&B spin-off and portfolio transformation, we continue to remain optimistic on DD given the
exposure to early recovery markets in Asia, autos and construction. Additionally, further cost reduction and portfolio transformation plans keep us buyers on any weakness," RBC said.
Earlier this week, DuPont completed the separation of Nutrition & Biosciences to International Flavors & Fragrances and tendered 197 million shares under the transaction. The company's new share count is expected to be about 528 million shares, down from 734 million shares in Q4. The company also received a special cash payment of $7.3 billion, of which it will use about $5 billion to repay existing debt.
DuPont also made structural changes to its portfolio by dividing its business segments into Electronics & Industrial, Mobility & Materials, and Water & Protection.
In addition, DuPont agreed to sell the Clean Technologies for $510 million in cash to an international private equity consortium consisting of BroadPeak Global, Asia Green Fund and The Saudi Arabian Industrial Investments Co.
After the settlement of the case with Chemours (CC), related uncertainties are likely to be eliminated, RBC said.
Looking at the recent steps taken by DuPont, RBC said it lowered its estimates on the company's Q1 EPS to $0.65 from $0.76, and fiscal 2021 EPS to $3.10 from $3.40. The broker-dealer also cut its price target on the company to $87 from $89, while maintaining its outperform rating.
Price: 75.90, Change: -1.08, Percent Change: -1.40