NEW YORK (TheStreet) -- Shares of Dupont E I De Nemours & Co. (DD) are lower by -0.69% to $64.50 in pre-market trade this morning after it was downgraded to "neutral" from "overweight" at JPMorgan Chase (JPM), with a price target cut to $67 from $74.
The agriculture company said it's struggling with farmers' preference for soybean rather than corn, the mainstay of the business, the firm's note said.
JP Morgan reduced its earnings per share forecast for the company to $4.60 from $4.75 for 2015, and said its estimated free cash flow yield for 2014 of 5% is now closer to 2.5% because of reduced cash flow from the agricultural operations.
Separately, TheStreet Ratings team rates DU PONT (E I) DE NEMOURS as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate DU PONT (E I) DE NEMOURS (DD) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, attractive valuation levels, expanding profit margins, good cash flow from operations and increase in stock price during the past year. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
- The debt-to-equity ratio is somewhat low, currently at 0.69, 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 1.07, which illustrates the ability to avoid short-term cash problems.
- 37.60% is the gross profit margin for DU PONT (E I) DE NEMOURS which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 14.15% is above that of the industry average.
- Net operating cash flow has slightly increased to -$2,421.00 million or 9.22% when compared to the same quarter last year. In addition, DU PONT (E I) DE NEMOURS has also vastly surpassed the industry average cash flow growth rate of -4128.45%.
- You can view the full analysis from the report here: DD Ratings Report