Corteva's Q1 Misses Estimates, but Strong Buy Rating Maintained by Deutsche Bank

Deutsche Bank's David Begleiter raised their price target on Corteva (NYSE: CTVA) by 4.8% from $62 to $65 on May 6, 2024. The analyst maintained their Strong Buy rating on the stock.

Begleiter's adjusted Corteva model was triggered by the company's Q1 2024 financial results, which were released on May 1, 2024. However, the first quarter performance fell short of expectations. Corteva reported earnings per share (EPS) of $0.89, missing the Zacks Consensus Estimate of $0.79 and showing a decline of 23% compared to Q1 2023's EPS of $1.16. Revenue for the quarter was $4.49 billion, also below the Zacks Consensus Estimate of $4.56 billion and down 8% from Q1 2023's revenue of $4.88 billion. The company's EBITDA was $1.03 billion, a 16% decrease year-over-year, and it reported cash used by operating activities of $2.61 billion.

Looking ahead to the full year of 2024, Corteva management provided guidance of EPS in the range of $2.70 to $2.90 and revenue between $17.4 billion and $17.7 billion. They also projected EBITDA of $3.5 billion to $3.7 billion, cash provided by operating activities of $2.1 billion to $2.6 billion, and free cash flow of $1.5 billion to $2.0 billion. Despite the mixed Q1 results, CEO Chuck Magro expressed confidence in the company's performance, particularly in the Seed business, which he attributed to "advantaged technology and latest product lineup" that delivered quality, yield, and value to farmers. Magro also anticipated growth in the second half of 2024 driven by a differentiated portfolio, leading biological products, and cost actions.

In addition to Begleiter's rating update, RBC Capital's Arun Viswanathan also issued an update on May 6, 2024. Viswanathan raised their price target on CTVA by 3.2% from $62 to $64 and maintained their Buy rating on the stock. Currently, 71.4% of top-rated analysts view CTVA as a Strong Buy or Buy, while 28.6% consider it a Hold. No analysts recommend or strongly recommend selling the stock.

Analysts have consensus expectations that CTVA will deliver earnings per share (EPS) of $1.77 for the upcoming year. If these projections hold true, CTVA's next yearly EPS will see a significant increase of 123.6% compared to the previous year.

Since the release of Corteva's Q1 2024 report on May 1, 2024, the stock price has increased by 4.5%. However, on a year-over-year basis, the stock is down 2.1%. During this period, CTVA has been trailing behind the S&P 500, which has experienced a decline of 25.2%.

Deutsche Bank analyst David Begleiter, who provided the rating update, is ranked by WallStreetZen in the top 9% out of 4,575 Wall Street analysts. Begleiter specializes in the Technology and Financial Services sectors, among others, and has an average return of 5.8% with a win rate of 53.8%.

Corteva, Inc. operates in the agriculture business, with two segments: Seed and Crop Protection. The Seed segment focuses on developing and supplying advanced germplasm and traits that optimize yield for farms. It offers trait technologies that enhance resistance to weather, disease, insects, and weeds, as well as improve food and nutritional characteristics. The Crop Protection segment provides products that protect against weeds, insects, pests, and diseases, while also enhancing crop health through nitrogen management and seed-applied technologies. Corteva operates across various regions, including the United States, Canada, Latin America, Asia Pacific, Europe, the Middle East, and Africa. The company is headquartered in Wilmington, Delaware.

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