What's Driving DuPont de Nemours Inc's Surprising 18% Stock Rally?

DuPont de Nemours Inc (DD, Financial), a prominent player in the chemicals industry, has recently experienced a notable uptick in its stock performance. Over the past week, the stock price has decreased by 1.76%, settling at $78.27. However, looking at a broader timeline, DuPont has seen an impressive increase of 17.96% over the past three months. Currently, the GF Value of DuPont stands at $77.46, suggesting that the stock is Fairly Valued. This is a slight shift from three months ago when it was considered Modestly Undervalued at $77.64.

Overview of DuPont de Nemours Inc

DuPont de Nemours Inc, commonly known as DuPont, is a global specialty chemicals company that emerged from the merger and subsequent separations involving DowDuPont. The company's diverse portfolio caters to various sectors including electronics, automotive, construction, and water management. DuPont is renowned for its patented specialty chemicals like Kevlar, Tyvek, and Nomex, which have broad applications across multiple industries and provide the company with significant pricing power. 1785673304691077120.png

Assessing DuPont's Profitability

DuPont boasts a strong Profitability Rank of 7 out of 10, indicating robust profitability within its industry. The company's Operating Margin stands at 14.15%, which is higher than 80.54% of its peers. Additionally, DuPont's Return on Equity (ROE) and Return on Assets (ROA) are 1.65% and 1.05% respectively, surpassing more than 30% of competitors in each category. The Return on Invested Capital (ROIC) at 5.41% also outperforms over half of its industry peers. DuPont has maintained profitability in 9 out of the last 10 years, underscoring its financial stability. 1785673323452198912.png

Growth Prospects of DuPont

The Growth Rank of DuPont is 5/10, reflecting moderate growth prospects. The company has demonstrated a 3-Year Revenue Growth Rate per Share of 11.10%, which is better than 59.61% of its industry counterparts. However, the 5-Year Revenue Growth Rate per Share is relatively lower at 1.20%. Looking ahead, DuPont is expected to grow its revenue by 1.80% over the next 3-5 years. The 3-Year EPS without NRI Growth Rate has been remarkable at 124.90%, and future EPS growth is estimated at 10.11%. 1785673341428985856.png

Key Stakeholders in DuPont

Among the top holders of DuPont stock, Barrow, Hanley, Mewhinney & Strauss leads with 4,723,367 shares, representing a 1.1% share. Following closely is Daniel Loeb (Trades, Portfolio), holding 3,465,000 shares (0.81% share), and PRIMECAP Management (Trades, Portfolio) with 2,716,656 shares (0.63% share). These significant investments reflect a strong confidence in DuPont's market position and future potential.

Competitive Landscape

DuPont faces stiff competition from other major players in the chemicals industry. Its closest competitor, LyondellBasell Industries NV (LYB, Financial), has a market cap of $32.47 billion, closely followed by PPG Industries Inc (PPG, Financial) with a market cap of $30.42 billion, and International Flavors & Fragrances Inc (IFF, Financial) at $21.7 billion. These companies are key players in the same space, providing similar products and services, which makes the competitive dynamics particularly interesting.

Conclusion

In conclusion, DuPont de Nemours Inc's recent stock performance reflects a strong market position bolstered by solid profitability metrics and promising growth prospects. The company's ability to maintain a competitive edge through innovation and strategic market positioning makes it an interesting prospect for investors. As the stock currently stands at a Fairly Valued position according to the GF Value, it presents a balanced opportunity for potential investors looking at both growth and stability in the chemicals industry.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

Disclosures

I/We may personally own shares in some of the companies mentioned above. However, those positions are not material to either the company or to my/our portfolios.