DuPont (DD) Breakup 'Highly Likely' Following CEO Exit, Says Deutsche Bank

Deutsche Bank analyst David Begleiter thinks a breakup of DuPont (NYSE: DD) is "highly likely" following the retirement of CEO Ellen Kullman, who has consistently argued against a breakup of DuPont. Begleiter noted that interim CEO Ed Breen, as CEO of Tyco, broke up the company twice.

"Following the abrupt retirement of CEO Ellen Kullman, the single biggest impediment, in our view, to a break-up of DuPont, and the appointment of Ed Breen, who as CEO of Tyco broke up the company twice, as interim CEO, we believe the likelihood of DuPont being broken up has increased substantially," said Begleiter.

"Notwithstanding a larger than expected earnings miss in 2H15 (announced in conjunction with the CEO transition), we believe the separation of DuPont into an Ag/Nutrition/Biosciences company and a Chemical/Materials company would unlock substantial shareholder value. With our SOTP analysis yielding a value of $67/shr vs a closing share price of $51/shr, we reiterate our Buy rating," added the analyst.

Deutsche Bank has a modified price target of $63.00 (prior $66.00) on DuPont.

For an analyst ratings summary and ratings history on DuPont click here. For more ratings news on DuPont click here.

Shares of DuPont closed at $51.28 yesterday.

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