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DowDuPont's Guidance Looks Conservative And Could Be Raised Soon

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DowDuPont's Guidance Looks Conservative And Could Be Raised Soon
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Initiating coverage of DowDuPont Inc (NYSE: DWDP), Argus said in a note Tuesday it believes the management guidance for $3 billion in cost synergies and $1 billion in growth synergies over the next 18 months are conservative. Therefore, the firm expects these two metrics to be raised going forward.

DowDuPont was formed on Sept. 1, 2017, from the merger of Dow Chemical Co with E I Du Pont De Nemours And Co.

As such, Argus initiated coverage of DowDuPont with a Buy rating and a $81 price target.

Analyst Bill Selesky noted that DowDuPont now has an industry-leading position in all three operating segments, namely Agriculture, Material Science and Specialty Products. Therefore, the analyst expects the combined company to benefit from its increased size and scale (see Selesky's track record here).

See also: A Look Ahead At DowDuPont's Catalysts Over The Next Year; Analyst Initiates At Buy

Argus estimates the new DowDupont to report earnings per share of $3.35 for 2017 and $4.06 for 2018, assuming flat to higher global GDP, flat to higher commodity prices and stable global industrial production. The consensus estimates call for earnings per share of $3.31 for 2017 and $4.03 for 2018.

The firm clarified that its price target of $81 implied a potential return of 16 percent, excluding any dividend payment.

"We expect a formal announcement about DWDP's dividend program to be made shortly," the firm said.

Related Link: Believing 17% Upside Lies Ahead, Cowen Upgrades DowDuPont
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Image Credit: By Brian Reading - Own work, CC BY-SA 3.0, via Wikimedia Commons

Latest Ratings for DWDP

DateFirmActionFromTo
Feb 2018BarclaysMaintainsEqual-WeightEqual-Weight
Feb 2018NomuraMaintainsBuyBuy
Jan 2018BarclaysUpgradesUnderweightEqual-Weight

View More Analyst Ratings for DWDP
View the Latest Analyst Ratings

Posted-In: Analyst Color Long Ideas News Guidance Price Target Commodities Initiation Markets Best of Benzinga

 

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