Special Situations
CTVA: Accumulate Here to Gain from Growth Prospects
The agriculture space has seen flooding across the US, foreign exchange and raw material cost volatility, and variable crop prices, but despite all these challenges, Corteva, Inc. (CTVA) demonstrated its strengths in its Q4FY19 and FY19 earnings last week (January 30). The earnings outperformance was supported by cost synergies realized since the Spinoff from DuPont de Nemours, Inc. (DD), with a new share repurchase program, annual dividend and inorganic growth ahead for shareholders.

  • Q4FY19 & FY19 Earnings Outperformance / Above-Market FY20E Guidance / +5% Jump on Results
  • North American Weather (Flooding) Remains a Key Uncertainty / Balanced Out by International Exposure
  • $800m Post-Spin Cost Synergies Realized with an Additional $400m in the Next Two Years
  • New $1bn Share Repurchase Program & $400m Annual Dividend ($220m Distributed Since Spinoff)
  • Investors Recommended to Accumulate at Current Levels / CTVA is a Current ESS Model Portfolio Holding
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