Nomura Securities Starts DuPont (DD) at Buy
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Nomura Securities initiates coverage on DuPont (NYSE: DD) with a Buy rating and a price target of $78.00, saying they see meaningful value creation potential from merger with Dow.
Analyst Aleksey Yefremov commented, "We expect the DuPont-Dow merger to generate above-trend growth in earnings and FCF for the next three years—exceptional in a macro environment where growth is scarce. Although DD offers an attractive total return of 16%—with dividend, based on our 12-month target of $78—it is management’s integration plan through 2019 that makes the shares even more compelling. The plan centers on aggressive cost cuts and asset spins/divestments, which we estimate should result in equity value compounding at 16% CAGR in 2017-2019. This extended investment horizon along with regulatory approval concerns keeps DD/DOW shares from reflecting the plan’s total return, thereby creating an attractive opportunity for longer-term investors."
Shares of DuPont closed at $69.50 yesterday.
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Create E-mail Alert Related CategoriesAnalyst Comments, New Coverage
Related EntitiesNomura, Earnings, Definitive Agreement
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