DuPont (DD) Stock Climbs, Names Edward Breen CEO
NEW YORK (TheStreet) -- DuPont (DD) - Get Report stock is increasing by 0.71% to $66.58 in mid-morning trading on Monday, after the company named Edward Breen CEO, effective immediately.
Breen had served as the science and technology-based company's interim CEO since October 16, following former CEO Ellen Kullman's retirement last month. Kullman had led DuPont since 2009.
When Breen succeeded Kullman as interim CEO, he noted he planned a "deep dive" into the company's cost structure and capital allocations so as to "deliver appropriate returns for our shareholders," the Wall Street Journal reports.
Breen already has discussed possible deals regarding the company's seed and crop-chemicals unit, and his appointment as CEO ups the likelihood that Dupont and Dow Chemical (DOW) will merge, Jonas Oxgaard, analyst at Sanford C. Bernstein, said in a note, according to Bloomberg.
Before joining DuPont, Breen was the CEO of Tyco (TYC) from 2002 to 2012, during which he oversaw the company's breakup and restructuring.
"Since joining the board and certainly over the last month while serving as interim chair and CEO, I have developed a deep appreciation of DuPont's fundamental strengths, significant advantages and future potential," Breen said in a statement. "I look forward to continuing to work closely with the team at DuPont and with the board of directors to deliver fully on that potential for our customers and our shareholders."
Separately, TheStreet Ratings team rates DU PONT (E I) DE NEMOURS as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
We rate DU PONT (E I) DE NEMOURS (DD) a HOLD. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including deteriorating net income, weak operating cash flow and a generally disappointing performance in the stock itself.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The debt-to-equity ratio is somewhat low, currently at 0.90, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Along with the favorable debt-to-equity ratio, the company maintains an adequate quick ratio of 1.24, which illustrates the ability to avoid short-term cash problems.
- Current return on equity exceeded its ROE from the same quarter one year prior. This is a clear sign of strength within the company. In comparison to other companies in the Chemicals industry and the overall market on the basis of return on equity, DU PONT (E I) DE NEMOURS has underperformed in comparison with the industry average, but has greatly exceeded that of the S&P 500.
- 38.33% is the gross profit margin for DU PONT (E I) DE NEMOURS which we consider to be strong. Regardless of DD's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of 4.79% trails the industry average.
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Chemicals industry. The net income has significantly decreased by 45.7% when compared to the same quarter one year ago, falling from $433.00 million to $235.00 million.
- Net operating cash flow has decreased to $200.00 million or 25.65% when compared to the same quarter last year. In addition, when comparing the cash generation rate to the industry average, the firm's growth is significantly lower.
- You can view the full analysis from the report here: DD
Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of Jim Cramer, TheStreet or any of its contributors.