DuPont de Nemours (DD) stock jumped out of the gate Tuesday after the global chemicals company beat top- and bottom-line expectations for its fourth quarter and reiterated the date for the spinoff of its electronics business.
In the three months ending December 31, DuPont's revenue increased 6.7% year over year to $3.1 billion. Its earnings per share (EPS) rose 29.9% from the year-ago period to $1.13.
"DuPont closed out a year of strong financial performance with solid fourth-quarter results as we saw continued strength in electronics end-markets and a return to year-over-year top-line growth in Water & Protection driven by further improvement in water and medical packaging end-markets," said CEO Lori Koch in a statement.
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The results topped analysts' expectations. Wall Street was anticipating revenue of $3.07 billion and earnings of 98 cents per share, according to Yahoo Finance.
In the first quarter, DuPont said it expects revenue of approximately $3.025 billion and earnings of roughly 95 cents per share. This compares to analysts' forecasts for revenue of $3.05 billion and earnings of 93 cents per share.
For the full fiscal year, DuPont expects to achieve revenue in the range of $12.8 billion to $12.9 billion and earnings of $4.30 to $4.40 per share. The midpoints of these ranges, revenue of $12.85 billion and earnings of $4.35 per share, came in below analysts' expectations for revenue of $12.9 billion and earnings of $4.40 per share.
"I am pleased with our solid fourth-quarter results which capped off a strong year of financial performance and we look to carry this momentum into 2025," said DuPont Chief Financial Officer Antonella Franzen in a statement.
DuPont's spinoff is expected to occur in November
DuPont also reiterated its intention to split off its electronics business on November 1.
"I am pleased with the progress we are making on the intended separation of our Electronics business targeted for November 1, 2025," Koch added. "We also remain excited for and confident in DuPont's value creation opportunities following the Electronics separation, centered around the high growth businesses of Water and Healthcare, along with other market-leading industrial product lines."
The company had originally planned to split into three companies – New DuPont, Electronics and Water Solutions – but changed those plans last month.
Is DuPont a buy, sell or hold?
DuPont has held its own on the price charts over the past 12 months, generating a 21% return, which is roughly in line with the S&P 500. And Wall Street sees even more upside for the materials stock.
According to S&P Global Market Intelligence, the average analyst target price for DD stock is $94.71, representing implied upside of nearly 16% to current levels. Additionally, the consensus recommendation is a Buy.
Financial services firm Jefferies is one of the most bullish outfits on the large-cap stock with a Buy rating and $116 price target.
"DuPont announced that the company intends to spin the electronics business by November 2025 (previously it was expected to separate by year-end 2025), and the water business will remain with the company," wrote Jefferies analyst Laurence Alexander in a January 16 note. "Water demand is in the early stages of a rebound, and DuPont may revisit its strategic options for water when there is evidence that the cycle has strengthened."
As for this year, Alexander believes electronics will lead DuPont's growth "given the relative strength of new fabs in China and the secular artificial intelligence tailwinds."
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