Was Jim Cramer Right About DuPont de Nemours (DD)? A Postmortem on a Cyclical Play

In October 2024, Jim Cramer highlighted dupont de nemours (NYSE:DD) as a top pick on Mad Money, citing its strategic moves, cyclical advantages, and dividend strength. Now, with a full seven months of data since his call, we dissect whether the stock’s performance aligns with his bullish stance—or if external headwinds derailed the narrative.

Cramer’s Case for DuPont: The Bullish Thesis

Cramer’s October 2024 recommendation centered on three pillars:
1. Strategic Restructuring: DuPont’s split into three focused businesses—electronics, safety/water, and industrial materials—was seen as a catalyst to unlock value. The acquisition of Donatelle Plastics (expanding its medical device capabilities) added to this narrative.
2. Hedge Fund Sentiment: With 58 hedge funds holding the stock (per Q2 2024 data), Cramer emphasized institutional confidence.
3. Analyst Upside: Analysts projected a 17.07% price target upside by October 18, 2024, driven by cyclical recovery in housing and industrial markets.

The Stock’s Performance: Peaks, Volatility, and a Steep Decline

Let’s examine DD’s trajectory from October 2024 to May 2025:
- October 2024: The stock surged to a peak of $89.64 on optimism around its restructuring and dividend declaration ($0.38/share).
- December 2024: A 9% drop to $76.19 as trade tensions with China escalated.
- May 2025: Closed at $67.25, a 24% decline from its late-October peak, despite modest recoveries in early 2025.

Key drivers of volatility included:
- Geopolitical Risks: A Chinese antitrust investigation into DuPont’s operations and U.S. tariffs triggered a 25% sell-off by early 2025.
- Cyclical Downturn: Weak auto sales and housing market softness hurt demand for DuPont’s industrial materials.
- Dividend Cut: The company reduced dividends to fund aggressive buybacks ($3.25B completed, $2B planned), which spooked some income-focused investors.

Ask Aime: "Did DuPont outperform the market after Cramer's October 2024 bullish call?"

Analyst Takeaways: Mixed Signals Amid Structural Challenges

While Cramer’s thesis on DuPont’s long-term potential held water, short-term execution faced headwinds:
1. Spin-off Progress: The planned split into three entities (electronics, safety/water, and industrial) remained on track, but delays in realizing synergies kept investors skeptical.
2. Valuation Debate:
- Bulls: Cited a forward P/E of 20x as reasonable for a company with 13.5% share reduction (via buybacks) and a strong balance sheet (net debt/EBITDA of 1.1x).
- Bears: Highlighted DuPont’s 25% underperformance versus the S&P 500 and its vulnerability to macroeconomic cycles.

1. Competing Priorities: Analysts increasingly prioritized AI-driven stocks, such as a “cheapest AI stock trading at <5x earnings,” over cyclical plays like DD.

The Verdict: Cramer Was Half-Right

Cramer’s recommendation correctly identified DuPont’s strategic strengths (restructuring, buybacks, and niche markets like EV materials). However, he underestimated the geopolitical and cyclical risks that dominated the narrative post-October 2024:
- Geopolitical Blows: The Chinese investigation and U.S. tariffs shaved ~10% off DD’s value by early 2025.
- Cyclical Underperformance: Despite analyst upside targets, DuPont’s exposure to autos and housing left it vulnerable to demand slowdowns.

The Deep Learning forecast (as of September 2024) that DD would fall to $69.19 by September 2025 proved accurate, underscoring the stock’s struggles.

Conclusion: A Cyclical Play, but Not Without Pitfalls

Jim Cramer’s call on DuPont de Nemours was partially validated:
- Right: He spotlighted DuPont’s restructuring, dividend discipline, and long-term growth in high-margin segments like semiconductors and EVs.
- Wrong: He underestimated the impact of geopolitical risks and cyclical volatility, which outweighed near-term fundamentals.

Investors considering DD today must weigh its structural advantages (diversified portfolio, buybacks) against ongoing risks (trade wars, economic cycles). While DuPont may recover as macro conditions stabilize, its May 2025 price of $67.25 suggests it remains a hold—not a buy—until geopolitical clouds lift and cyclical tailwinds return.

As Cramer himself might say: “DuPont’s story isn’t dead, but it’s a marathon, not a sprint—and the path is rocky.”