Corteva announces 2019 guidance
On February 21, Corteva Agriscience, DowDuPont’s (DWDP) agriculture division, provided its 2019 guidance in its sell-side analyst meeting. Corteva is scheduled to separate from DowDuPont on June 1. In the meeting, James C. Collins, the CEO-elect, and Greg Friedman, the CFO-elect, addressed and reviewed the strategies and priorities for shareholder value creation.
- Corteva expects the 2019 sales to remain flat compared to the previous year. The organic growth is expected to be 1%–2%. The company said that there’s currency pressure, especially from the euro and the Brazilian real.
- The operating EBITDA is expected to be $2.8 billion.
- The capital expenditure is estimated at $650 million.
- Corteva expects the operational tax rate to be 19%–21%.
Friedman said, “We continue to drive sales performance by taking full advantage of our robust product pipeline. We are also focused on moving beyond merger-related synergies to delivering productivity, which is a cornerstone of our performance-based culture, and emphasizing continuous improvement across all of our processes.”
DowDuPont’s stock price
DowDuPont’s stock price rose 1.35%% and closed at $54.97 for the week ending February 22. Despite the gain in the stock price, DowDuPont traded 2.14% below the 100-day moving average price of $56.17. DowDuPont’s 100-day moving average has fallen from a high of $67.6 to the current levels in the past six months, which indicates weakness in the stock. However, DowDuPont has risen 3.7% in 2019. DowDuPont’s 14-day relative strength index of 52 indicates that the stock isn’t overbought or oversold.
Investors could hold DowDuPont indirectly by investing in the Materials Select Sector SPDR Fund (XLB). XLB has invested 19.8% of its portfolio in DowDuPont. XLB also provides exposure to Linde (LIN), Air Products and Chemicals (APD), and LyondellBasell (LYB) with weights of 14.7%, 6.2%, and 4.3%, respectively, as of February 22.