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DowDuPont: Will 1Q18 Earnings Help the Stock Recover?

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DowDuPont’s 1Q18 earnings

DowDuPont (DWDP) is scheduled to announce its 1Q18 earnings on May 3 at 8:00 AM EST before the market opens. DowDuPont will hold a conference to discuss the results. In this series, we’ll discuss DowDuPont’s stock performance since its 4Q17 earnings. We’ll also look at analysts’ revenue and EPS (earnings per share) estimates and analysts’ latest recommendations.

DowDuPont announced its 4Q17 earnings on February 1. Since then, the stock has declined 14%. The decline was primarily due to volatility in the stock market amid geopolitical tension in the Middle East and rising fuel prices. The trade war related to the tariff war between China and US had a negative impact on DowDuPont’s stock price. After the US imposed $50 billion in tariffs, mainly on steel, China retaliated and stated that it would impose tariffs on chemicals, soybeans, and other products.

A strong 1Q18 earnings could help DowDuPont recover some lost ground. Investors will be watching the synergy impact from the merger. Eastman Chemical (EMN) and Monsanto (MON) gained 7.0% and 2.3%, respectively, while LyondellBasell (LYB) declined 9.9%.

Moving averages and RSI

The decline in the stock price pushed DowDuPont to trade ~10.2% below the 100-day moving average price of $70.33, which indicates weakness in the stock. However, DowDuPont’s 14-day RSI (relative strength index) has moved to 40, which means that the stock isn’t overbought or oversold. An RSI of 30 and below suggests that the stock has temporarily moved into an “oversold” position. An RSI of 70 and above indicates that the stock has temporarily moved into an “overbought” position.

Investors could hold DowDuPont indirectly by investing in the First Trust Indxx Global Agriculture ETF (FTAG). FTAG has invested 9.3% of its portfolio in DowDuPont as of April 24.

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