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Corteva Inc CTVA

Morningstar Rating
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Morningstar’s Analysis

Valuation
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Raising Corteva's FVE to $47 on Improved Near-Term Outlook; Shares Fairly Valued

Seth Goldstein, CFA Senior Equity Analyst

Analyst Note

| Seth Goldstein, CFA |

Corteva reported strong second-quarter results. Operating EBITDA was up 18% year on year, driven by higher prices and volumes in both seeds and crop protection. We have slightly increased our near-term profit forecast to account for a greater proportion of premium product sales this year and in 2022 than we had previously forecast. Separately, we have increased our tax rate forecast to incorporate the effect of a higher U.S. corporate tax rate. After updating our model to reflect these changes, we are raising our fair value estimate for Corteva to $47 per share from $45. Our wide moat rating is unchanged. At current prices, we view Corteva shares as fairly valued, with the stock trading slightly below our fair value estimate but in 3-star territory.

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Company Profile

Business Description

Corteva was formed in 2019 as the agriculture division of the DowDuPont merger and subsequent separation. The company is a leader in the development of new seed and crop chemicals products. Seeds generate a little over half of total company profits and crop protection chemicals make up the remainder. Although Corteva operates globally, around half of revenue comes from North America.

Contact
974 Centre Road
Wilmington, DE, 19805
T +1 302 774-1000
Sector Basic Materials
Industry Agricultural Inputs
Most Recent Earnings Jun 30, 2021
Fiscal Year End Dec 31, 2019
Stock Type Cyclical
Employees 21,000

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