Bank of America Reiterates Buy, $54 Target on DuPont

Bank of America maintains its Buy rating and $54 target price on DuPont DD as it assesses 2012 EPS growth in light of headwinds and tailwinds. BofA says, “We calculate that DuPont faces ~$1.2bn or nearly $1.00 of EPS headwinds in 2012 from the sum of projected inflation of 4% in raw material and energy costs ($0.75bn), higher pension expense ($0.25bn), and lower pharma earnings ($0.22bn). After factoring estimated EPS accretion of $0.25 from Danisco and projected fixed-cost savings of $0.3bn, or $0.25, DuPont would need to generate net earnings contributions of $1.0bn, or nearly 3% of sales, from the sum of operating leverage, pricing and other savings to grow EPS 10% at the midpoint.” DD closed at $43.49 per share on Tuesday.