Corteva, the Basic Materials sector company, was revisited by a Wall Street analyst today. Analyst Jeffrey Zekauskas from J.P. Morgan upgraded the rating on the stock to a Buy and gave it a $70.00 price target.
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Jeffrey Zekauskas has given his Buy rating due to a combination of factors surrounding Corteva’s strategic decision to split into two distinct entities: a seed company and a crop chemical company. This separation is expected to unlock value by allowing each segment to focus on its core strengths and growth opportunities. The seed company, free from historical liabilities, is anticipated to experience faster growth and benefit from trading multiple expansion due to its lower financial leverage.
Despite the initial negative market reaction to the split announcement, Zekauskas believes that the market has undervalued Corteva. The current trading multiples for the seed and crop chemical segments suggest a significant upside potential compared to industry peers. Specifically, the crop chemical segment is expected to trade at a premium to similar companies like FMC, which faces challenges such as patent expirations. Consequently, Zekauskas maintains a price target of $70 for Corteva, reflecting confidence in the company’s long-term value creation strategy.
Zekauskas covers the Basic Materials sector, focusing on stocks such as Cf Industries Holdings, Westlake Corporation, and Corteva. According to TipRanks, Zekauskas has an average return of 3.9% and a 55.15% success rate on recommended stocks.
In another report released today, Barclays also maintained a Buy rating on the stock with a $84.00 price target.