Mizuho has maintained its Outperform rating on Corteva Inc. (NYSE: NYSE:CTVA) with a steady price target of $61.00.
The firm's analysis expects a seasonally weak third quarter, predicting a negative EBITDA of approximately $5 million, which is below the Bloomberg consensus of $34 million.
The anticipated loss is primarily attributed to the Seed business, where an EBITDA loss of $236 million is expected compared to $138 million in the previous year and a gain of $1.7 billion in the second quarter of 2024.
The Crop Protection segment, however, is forecasted to achieve an EBITDA of $262 million for the third quarter. The analyst noted challenges including unfavorable weather conditions that affected Latin America Seed sales, particularly with reduced corn acreage in Argentina, and pricing pressure within the crop protection market.
These factors have led to a revised fourth-quarter EBITDA estimate, which has been decreased by roughly $40 million to $505 million from the previous estimate of $544 million.
As a result of the adjustments made for the fourth quarter, the full-year 2024 EBITDA estimate for Corteva has been lowered to $3.45 billion from the prior estimate of $3.49 billion.
The forecast for 2025 has also been adjusted, with the EBITDA estimate now set at $3.87 billion, a reduction from the earlier projection of $4.09 billion.
In other recent news, Corteva Agriscience has reported growth in both top and bottom-line results during its second quarter of 2024 earnings call, despite competitive market conditions and weather-related challenges.
The company's Seed business showed strong demand, particularly for the Enlist E3 technology and Pioneer brand Z-series soybeans. Corteva's Crop Protection business registered over 100 new products globally, although it faced market pressures. It also plans to complete $1 billion in share repurchases and has announced a 6.25% increase in the annual dividend.
Furthermore, Corteva has made a strategic investment in Pairwise, a company specializing in gene-edited produce. This $25 million equity stake forms part of a five-year joint venture aimed at accelerating the development of new genetic technologies.
An analyst from Oppenheimer has maintained an Outperform rating on Corteva's stock, highlighting the potential of the company's Seed business and its investment in Pairwise.
InvestingPro Insights
Mizuho's assessment of Corteva Inc. (NYSE:CTVA) paints a picture of a company facing seasonal and market challenges. To complement this analysis, InvestingPro insights reveal a multifaceted financial landscape for Corteva. With a Piotroski Score of 9, Corteva demonstrates strong financial health, suggesting that the company is well-positioned to weather current market conditions. Additionally, the company's commitment to returning value to shareholders is evident through a track record of raising its dividend for 5 consecutive years and a notable share buyback strategy.
On the financial metrics front, Corteva boasts a market capitalization of $40.07 billion and has maintained a gross profit margin of 43.68% over the last twelve months as of Q2 2024, showcasing its ability to retain a significant portion of its revenue as gross profit. Despite a slight revenue decline of 3.59% during the same period, the company's dividend growth of 13.33% signals confidence in its financial stability and future prospects. Investors might also find Corteva's trading position near its 52-week high and a price to earnings (P/E) ratio of 30.33 (adjusted for the last twelve months as of Q2 2024) to be of interest when evaluating the company's valuation and growth potential.
For those seeking a deeper dive into Corteva's financial health and future outlook, InvestingPro offers additional tips, including insights on the company's profitability and stock performance over the last five years. To explore these further, visit InvestingPro's dedicated page for Corteva, where more tips are available for in-depth analysis.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.