Jefferies Lowers Estimates on DuPont (DD)

Jefferies & Co. is out with an analyst note this morning where they reiterate their Buy rating on shares of DuPont DD. They have a $44.00 price target on the stock. Jefferies analysts cited a recent meeting with DuPont’s chair and CEO, where they addressed end market dynamics, M&A and divestitures, and the ongoing effort to structurally improve DuPont's ability to deliver (and retain) productivity savings. Analysts said “Order visibility has improved to 13-14 weeks from 3-4 days a year ago: a positive development, but not necessarily enough to warrant starting up idle lines. The pattern of "rush orders" reported in early-cycle businesses such as TiO2 appear to be spreading across the portfolio.” When asked about Europe, management said “To date, European order patterns have not frozen the way they did in 2008. If anything, some customers are indicating volumes are starting to improve due to a stronger export position.” Productivity was a key talking point with Jefferies positing “DuPont's productivity initiatives appear to be gaining traction, with a sharper focus on cash management and the tools to maintain capital discipline.” “DuPont is applying a similar management to R&D, balance short and longer-term projects in each SBU pipeline. This should magnify DuPont's cyclical leverage (we estimate 1% increase in volumes across DuPont's portfolio should add 4% to EPS).”