On Wednesday, BofA Securities issued an upgrade for Corteva Inc. (NYSE:CTVA), shifting its rating from Neutral to Buy and increasing the price target to $67 from the previous $59. The upgrade is based on several positive developments that are expected to benefit the company in 2025 and onwards.
The analyst cited a recent Ag Retailer Survey, which indicated stronger-than-anticipated corn seed pricing for 2025. The survey also suggested potential continued market share growth for Corteva's Enlist, with an additional 4 percentage point increase if branded dicamba labels are not renewed. This outcome was deemed likely based on feedback from a recent trip across the Cornbelt.
In September, the U.S. Department of Commerce recommended imposing duties on imports of 2'4-D, a crucial herbicide for Corteva. This move is anticipated to positively impact the company's competitive position.
Further bolstering the upgrade is the increased clarity regarding royalties expected in 2025 and a reduction in costs exceeding $400 million. The analyst expressed optimism about Corteva's long-term prospects, particularly highlighting the company's advancements in gene editing. This includes the development of a corn product with fungal disease-resistant traits, which has recently received approval from the USDA as a non-GMO product.
The analyst's outlook suggests that these combined factors create a favorable environment for Corteva, positioning it for success in the coming years and justifying the raised price target and improved stock rating.
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