Today, DuPont de Nemours Inc (DD, Financial) experienced a daily gain of 2.48%, contributing to a three-month gain of 17.31%. With an Earnings Per Share (EPS) of 0.81, investors and analysts are keen to understand: Is DuPont de Nemours fairly valued at its current market price? This analysis delves into the intrinsic valuation of DuPont de Nemours, guided by the exclusive GF Value, to determine its fair market position.
Company Overview
DuPont de Nemours, a global leader in specialty chemicals, emerged from the 2019 DowDuPont merger. Specializing in products like Kevlar, Tyvek, and Nomex, DuPont serves diverse industries such as electronics, automotive, and construction. The company's ability to innovate and maintain a portfolio of patented products grants it significant pricing power. Currently, with a market cap of $33.20 billion and a stock price of $79.49, the GF Value estimates DuPont de Nemours' fair value at $77.29, suggesting that the stock is fairly priced.
Understanding GF Value
The GF Value is a proprietary measure reflecting the true value of a stock, calculated from historical trading multiples, a GuruFocus adjustment factor based on past performance, and future business performance estimates. For DuPont de Nemours, the GF Value indicates the stock is trading close to its intrinsic value, suggesting a balanced risk-reward ratio for investors. If the stock price deviates significantly from this line, it may indicate overvaluation or undervaluation, affecting potential returns.
Financial Strength and Risk Assessment
Investing in companies with robust financial health reduces the risk of permanent capital loss. DuPont de Nemours, with a cash-to-debt ratio of 0.25, ranks below average compared to its industry peers. This metric, along with the company's fair financial strength rating of 6 out of 10 by GuruFocus, suggests cautious consideration for risk-averse investors.
Profitability and Growth Prospects
DuPont de Nemours has shown consistent profitability, with a 9-year profitability streak. The company's operating margin stands at 13.76%, outperforming 80.18% of its industry counterparts. Additionally, with a 3-year average annual revenue growth rate of 11.1%, DuPont de Nemours demonstrates a strong potential for future growth, ranking better than 60.79% of companies in the Chemicals industry.
When comparing Return on Invested Capital (ROIC) to Weighted Average Cost of Capital (WACC), DuPont de Nemours currently underperforms, with an ROIC of 5.28% against a WACC of 9.99%. This comparison is crucial as it indicates how effectively the company is generating returns on its investments.
Conclusion
Overall, DuPont de Nemours (DD, Financial) appears to be fairly valued, considering its current market performance, financial health, and growth prospects. Investors seeking further insights into DuPont de Nemours can explore its 30-Year Financials here. For those looking for high-quality companies with potentially above-average returns, consider exploring the GuruFocus High Quality Low Capex Screener.
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.
