NEW YORK (TheStreet) -- Shares of E I Du Pont De Nemours (DD) are declining by 2.95% to $66.48 on Wednesday afternoon, after JPMorgan issued a downbeat analyst note on the chemical company's planned spin-off of Chemours, its performance chemical division.
"We regard the spin as a dilutive transaction for the parent company. DuPont will lose roughly $978 million in operating income, or $900 million after eliminating an estimated $75 million in residual costs," the firm said in a note.
JPMorgan is expecting Chemours cash flow generation to be negligible for 2015, resulting in the company having to borrow in order to pay the initial quarterly dividend of $100 million it committed to in September, MarketWatch reports.
JPMorgan has a "neutral" rating on DuPont. The firm thinks it will be difficult for DuPont to grow its 2015 base earnings due to a difficult agricultural and currency environment.
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, reasonable valuation levels, good cash flow from operations, notable return on equity and expanding profit margins. We feel its strengths outweigh the fact that the company has had sub par growth in net income."