DowDuPont Cements Its Rank as Dow's Poorest Performer

Industrials

Published: October 20, 2018 8:35 am

Last Updated: January 11, 2020 4:08 pm

DowDuPont Inc. (NYSE: DWDP) saw its share price dive again last week, although it was not the week’s biggest loser. That honor goes to IBM, which dropped more than 8% in the week. DowDuPont’s shares slipped 3.6% last week to take the stock down by 19.3% for the year to date.

The second-worst Dow Jones industrials stock so far this year is Caterpillar Inc. (NYSE: CAT), which is down 16.7%. That is followed by International Business Machines Corp. (NYSE: IBM), down 15.9%, 3M Co, (NYSE: MMM), down 15.1%, and Goldman Sachs Group Inc. (NYSE: GS), down 10.9%. Fourteen of the 30 Dow stocks trade lower so far in 2018.

The blue-chip index added about 104 points last week to close at 25,444.34, up about 0.7% compared to the previous Friday’s close. For the year to date, the index is up 2.5%, trailing both the S&P 500 (up 2.6%) and the Nasdaq Composite (up 6.3%).

On Thursday, the company filed a Form 10 with the U.S. Securities and Exchange Commission related to the planned June 2019 spin-off of its agricultural sciences division into a new company to be called Corteva. Included in the filing was this little tidbit:

On October 18, 2018, E. I. du Pont de Nemours and Company (“DuPont”), a subsidiary of DowDuPont, announced that it would recognize non-cash impairment charges associated with DuPont’s agriculture reporting unit in the quarter ended September 30, 2018, of about $4.5 billion for goodwill and $0.1 billion for other assets.

That sentence sent the stock down by about $2 a share as of Friday’s close. Later in the day, the company issued a second statement following negative trading action in DowDuPont stock:

[The Form 10 filing] reflects the effect of previously reported market conditions, and has no impact on [the company’s] previously announced financial guidance for the Agriculture Division of DowDuPont for the full-year 2018.

The Company previously announced that it expects 2018 full-year results for its Agriculture Division to reflect flat net sales and a mid-single digits percent increase in operating EBITDA.

DowDuPont’s stock closed at $57.49 on Friday, down about 1.9% for the day in a 52-week range of $57.19 to $77.08. The low was posted Friday. The 12-month consensus price target on the stock is $80.05, and the forward price-to-earnings ratio is 12.0.