Analysts are Upgrading These 5 Stocks

03. DuPont de Nemours, Inc. (NYSE:DD)

Number of Hedge Fund Holders: 48

DuPont de Nemours, Inc. (NYSE:DD) is a global leader in the specialty materials industry. The company has a plethora of offerings for the energy industry, ranging from the exploration and production of oil and gas to solar PV technologies, wind technologies, and fuel cell technologies. On May 15, DuPont de Nemours, Inc. (NYSE:DD) was upgraded by Deutsche Bank analyst David Begleiter from Hold to Buy, along with an increased price target of $80, up from $70. This target implies a potential upside of 25%. Begleiter notes that since the shares were downgraded in mid-January, they have declined by 15% compared to a 3% gain in the S&P 500 Index. As a result, DuPont de Nemours, Inc. (NYSE:DD) stock is now trading at a 50% discount compared to its peers. The analyst believes this presents an opportunity for investors and advises a Buy rating on the stock.

Third Point made the following comment about DuPont de Nemours, Inc. (NYSE:DD) in its Q4 2022 investor letter:

“We recently increased our investment in DuPont de Nemours, Inc. (NYSE:DD), a specialty chemical company run by legendary value creator Ed Breen, who is leading a corporate transformation. In November, DuPont divested its most cyclical and lowest margin business segment, Mobility & Materials, to Celanese for $11 billion, or 14x 2023e EV/EBITDA. Following the divestiture, the improved DuPont trades at 11x 2023e EV/EBITDA, which represents a ~30% discount to its peer group.

We believe the company is laser-focused on closing this gap. First, $5 billion of the proceeds are being deployed to repurchase nearly 15% of its outstanding shares. The next significant catalyst for the stock is a potential settlement of PFAS-related multidistrict litigation in South Carolina, which remains an overhang on the stock even though DuPont’s PFAS liability was largely ring-fenced by the 2021 settlement with Chemours and Corteva. DuPont’s strong management team is eager to demonstrate the business quality of the new portfolio during the current period of economic volatility. We expect the combined catalysts of increased share repurchases, the pending resolution of legal claims, and the new business structure to drive meaningful value for shareholders.”