Stock Analysis | DuPont de Nemours Outlook - A Mixed Bag for Investors

Market Snapshot

Takeaway: DuPont de Nemours (DD) is currently facing weak technical indicators and negative momentum, despite some positive news in fundamentals and a modest price increase in the short term. Investors are advised to proceed with caution.

News Highlights

Recent news includes significant developments in the chemical and energy sectors that could indirectly influence DD's performance. For example:

• Safex Chemicals' Expansion: A new facility in India will boost crop protection solutions and supply chain resilience, which could affect chemical demand and pricing across the industry.
• U.S. China Trade Restrictions: New export curbs on chemicals and technology to China could impact global supply chains, potentially influencing DD's business, given its exposure to the sector.
• Indonesia-Singapore Solar Milestone: A large-scale solar and battery storage project between TotalEnergies and RGE could shift energy dynamics and offer alternative solutions, indirectly affecting chemical demand in the long term.

Analyst Views & Fundamentals

Analysts remain mixed, with three key institutions offering varied perspectives:

• RBC Capital (Arun Viswanathan): A "Buy" rating, with a historical win rate of 66.7% and average yield of 1.30%.
• Keybanc (Aleksey Yefremov): Also a "Buy," with a strong historical win rate of 66.7% and an average yield of 0.13%.
• UBS (Joshua Spector): A "Strong Buy," though with a lower historical win rate of 40.0% and a negative average yield of -0.53%.

Average rating score: 4.33 (simple mean).

Weighted rating score: 3.85 (adjusted for performance).

The ratings are not entirely aligned with the current 3.06% price increase observed in the stock. This suggests that while the price is rising, not all analysts are fully confident in the momentum.

On the fundamental side, the internal diagnostic score is 5.36, indicating moderate strength, but with notable weaknesses. Key factors include:

• Operating revenue growth: 3.62% YoY (model score: 3.00)
• Cost of sales ratio: 62.64% (model score: 2.00)
• Current ratio: 1.41 (model score: 2.00)
• Net cash flow per share (YoY): -25.41% (model score: 3.00)
• PE ratio: 856.36 (model score: 1.00)

High PE and high cost of sales ratio suggest the company is facing operational and valuation challenges. However, moderate revenue growth and a manageable current ratio offer some support.

Money-Flow Trends

Big-money and institutional investors have been active, with an overall negative trend in fund flows. Specifically:

• Large-inflow ratio: 48.36% (model score: 7.73) – indicating some institutional participation but still on the bearish side.
• Extra-large-inflow ratio: 42.75% – further reinforcing negative sentiment at the institutional level.
• Retail (Small) inflow ratio: 49.59% – also negative, showing that retail investors are not currently enthusiastic about DD.

Given that both big-money and retail flows are trending negative, the overall fund-flow score is 7.73, which is high for a negative trend, suggesting that large investors are exiting more aggressively than retail investors.

Key Technical Signals

Technically, DD is struggling. The technical score is a weak 2.17, and there are 4 bearish indicators versus 0 bullish ones over the past 5 days. Here are the key signals:

• WR Oversold: Internal diagnostic score: 3.28. While it’s a neutral signal, it appears frequently and has a mixed win rate of 50% historically.
• Bearish Engulfing: Internal diagnostic score: 1.00. A clear bearish pattern, with a poor win rate of 28.57%.
• Earnings Release Date: Internal diagnostic score: 1.00. Past releases have led to an average decline of -1.43%.
• RSI Oversold: Internal diagnostic score: 3.42. Again, neutral but with a moderate win rate of 46.67%.

Recent chart patterns include a Bearish Engulfing on August 15 and an Earnings Release on August 5, both of which contributed to the negative sentiment. With 4 bearish signals versus 0 bullish, the technical outlook is clearly weak.

Conclusion

While DuPont de Nemours has shown some fundamental strength, especially in revenue growth, the technical indicators and fund-flow trends are deeply bearish. The internal diagnostic score of 2.17 signals a weak market environment and the recent chart patterns are reinforcing this bearish sentiment.

Investor takeaway: Consider waiting for a clearer reversal signal or monitoring upcoming earnings (next release date is key) for potential turning points before considering any new positions in DD.