DuPont Shares Fall After Barclays Downgrades, Breakup Concerns By Investing.com

Investing.com — Shares of DuPont de Nemours (NYSE: ) fell 2.9% in pre-market trading on Monday after Barclays downgraded the stock to “underweight” from “equal weight.”

Analysts at Barclays have expressed concern over the company’s valuation, which they believe has peaked following recent market optimism.

They signaled that DuPont shares had climbed to multiyear highs, but warned that the next few quarters could bring increased uncertainty.

This, combined with limited share buyback support and increased market volatility, positions DuPont for a potential underperformance.

One of the main factors behind the downgrade is the planned break-up of DuPont into three separate entities.

Barclays analysts say that while many bulls expect the company’s divisions, particularly the water and electronics units, to command high valuations after the split, there is skepticism that DuPont’s remaining core businesses, known as RemainCo, will reevaluate at higher multiples.

This is particularly worrying as RemainCo, which spans several cyclical and industrial sectors, could struggle amid wider market uncertainties.

Barclays analysts also noted that the company’s fundamentals remain “charged”, particularly in sectors such as electronics and wider industrials, which are experiencing slowing growth.

Analysts also cited concerns about DuPont’s cash conversion rates, PFAS liabilities and potential dis-synergies as the company moves forward with its spin-off.

Analysts added that while DuPont’s leadership transition — particularly the shift of the longtime CEO to the role of executive chairman — was generally well received by investors, it leaves open questions about how the new management will perform , particularly as the company navigates the complexities of its multifaceted separation.

In addition, Barclays cut its price target on DuPont to $84 from $88, representing a downside of about 4% from the previous price.

Analysts remain cautious about the company’s ability to generate significant equity, especially as investors await more details on the spin-off and leadership transitions in the coming months.