Morgan Stanley says DuPont’s announcement that it will spin off its water and electronics businesses tax free to shareholders in the next 18-24 months was “an unanticipated but ultimately not surprising move” and the firm expects “a positive share price response to DuPont’s strategic announcement.” The move creates a new company specific narrative for the equity, with “solid upside optionality in the more optimistic post-spin valuation cases,” says the firm, which adds that it views this further separation as “the logical decision for DuPont at this point in time.” Morgan Stanley has an Equal Weight rating and $80 price target on DuPont shares, which are up $4.35, or nearly 6%, to $82.90 in pre-market trading.
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