Stock Analysis | DuPont de Nemours Outlook - A Weak Technical Picture Amid Mixed Analyst and Earnings News

Market Snapshot

Headline takeaway: DuPont de Nemours (DD) is currently in a weak technical position, with the stock down about 5.35% recently, and our internal diagnostic score (0-10) for technical strength at 2.44—suggesting a cautious stance for now.

News Highlights

• New Jersey Settlement: DuPont and its subsidiaries have agreed to a $2 billion settlement with New Jersey over "forever chemicals," a major environmental and financial impact. This could affect earnings and public sentiment in the near term.
• Recent Earnings Release: On August 5, the company released earnings, which is a key event to watch given the negative technical score tied to such events (internal diagnostic score of 1.06). This highlights the importance of upcoming results.
• Industry Rivals: A $875 million settlement from Chemours and Corteva (DuPont subsidiaries) over similar claims highlights a broader industry issue, suggesting regulatory and legal risks could linger for all players.

Analyst Views & Fundamentals

Average Analyst Rating (Simple Mean): 4.50
Weighted Analyst Rating (Performance-Weighted): 3.06
Ratings Consistency: Dispersed—two recent ratings from UBS and Keybanc are both positive (Strong Buy and Buy), but their historical success rates are low (40% and 33.3%, respectively).

This divergence means investors should treat analyst views with caution. The current price trend is clearly downward (-5.35%), which contrasts with the mostly positive recent ratings—this mismatch suggests the market may not be fully pricing in the analysts' optimism.

Key Fundamental Factors:

• Net cash flow from operating activities per share (YoY growth rate %): -25.41% (internal diagnostic score: 3.00) — Weak cash generation growth is a red flag.
• Gross profit margin (%): 37.36% (internal diagnostic score: 2.00) — Healthy but not robust enough to support high confidence in profitability.
• PE ratio: 856.36 (internal diagnostic score: 1.00) — Very high valuation, suggesting the stock is overpriced relative to earnings.
• Cost of sales ratio (%): 62.64% (internal diagnostic score: 2.00) — High, pointing to pressure on margins.
• Current ratio: 1.41 (internal diagnostic score: 3.00) — Suggests acceptable liquidity but not impressive.
• Cash-UP: 0.78 (internal diagnostic score: 2.00) — Suggests strong cash flow to market value but needs confirmation in earnings.
• CFOA: 2.09% (internal diagnostic score: 2.00) — Suggests modest operating cash flow growth.

Money-Flow Trends

Large money flows are currently negative, with the internal diagnostic score (0-10) for fund flow at 7.6, indicating a "good" trend despite the overall stock weakness. This suggests institutional players are cautious or even taking profits. Notably:

• Extra-large and Large inflow ratios: Both are below 50%, indicating big-money players are pulling back.
• Small inflow ratio: 50.05%, the only positive trend, suggests retail investors or smaller players are still active. However, this should be approached with caution as retail buying can be speculative.

Key Technical Signals

DuPont's technical indicators are overwhelmingly negative. Here are the internal diagnostic scores (0-10) for key indicators:

• RSI Oversold: 2.84 — Weak bearish signal despite the indicator typically suggesting potential buying opportunities.
• MACD Death Cross: 2.46 — Strong bearish signal, typically indicating a trend reversal to the downside.
• WR Oversold: 3.41 — Neutral to slightly bearish — not a strong buy signal.
• Earnings Release Date: 1.06 — Strong bearish signal, suggesting increased volatility and risk during such events.

Recent Chart Patterns:
On July 25, a MACD Death Cross was noted, which is bearish.
On August 1, both WR Oversold and RSI Oversold indicators were active, typically suggesting a bounce—yet the stock continued down.
On August 5, the stock released earnings, another key event to watch for trend confirmation.

Key Insights: The technical indicators show a clear bearish bias (4 out of 4 indicators negative). The internal diagnostic score (0-10) for technical strength is 2.44, which aligns with a weak trend and suggests traders should remain cautious or avoid new positions for now.

Conclusion

While DuPont's fundamentals show mixed signals and recent analyst ratings are mostly positive, the technical picture is clearly bearish. The recent $2 billion settlement with New Jersey, combined with a weak technical trend and an upcoming earnings event, suggests that investors should be cautious. With the internal diagnostic score (0-10) for technicals at just 2.44, the stock is not in favorable shape for new longs at the moment. Consider waiting for a clearer technical signal or a pull-back after earnings before taking a position.