Jefferies Comments On DuPont Following Investor Day

At its investor day, DuPont DD set a 2011 EPS range of $3.30-$3.60 and a five-year EPS CAGR of 12%. Jefferies views the 2011E outlook as fair-to-conservative, and the longer-term targets reasonable - barring a recession or adverse structural shifts in global growth. As the economic recovery gains momentum, DuPont's early cycle leverage becomes less important, and the investment case shifts to the near-term opportunity to gain share in the seed business and to transform and revive the portfolio through M&A. In 2009, DuPont cut fixed costs by $1.1bn ($0.85/share), and it aims to keep 75% of those savings. The company targets another $1bn through 2012 and is on track for $400m-plus in 2010; $300m/year thereafter. This would translate into a cumulative $1.46/sh tailwind to EPS. Jefferies has a Buy rating and $55 PT on DuPont DD closed Thursday at $48.32