Deutsche Bank Reiterates Buy Rating on DuPont (DD)

Deutsche Bank is out with a research report this morning, where it reiterates its Buy rating on DuPont DD; it has a $55.00 price target on the stock, up from $52.00. The DB analysts cited the company's recent investor day, where the key takeaways included: 1. “Sales from new products will total a record 30% in 2010. In 2010, 85%of the $1.6B in R&D spending was on innovation addressing megatrends. 2. Productivity remains a key driver of DuPont's growth. In 2011, fixed-cost productivity gains of $300MM and working capital productivity of $400MM are expected. 3. Sales from developing markets are expected to increase from 32% in '10 to 36% in '11. 4. DuPont is evaluating a major brownfield TiO2 expansion with start-up in 2014. The expansion would likely be a single production line of 150,000 m.t., or 3% of global capacity, and cost $500MM ($3,333/m.t.). 5. Rynaxypyr insecticide peak sales will reach $500MM in 2010E, $100MM above prior estimates. 6. Photovoltaic sales are expected to increase from $1B in 2010E to $2B in 2014E.” As for valuation, the analysts remarked, “Our $55 target is based on our SOTP analysis ($18 Pioneer, $3.50 Ag Chems, $3.50 Safety & Protection, $27 core, $2.50 Applied Bio).”