DuPont de Nemours, Inc.

Based on a comprehensive analysis of DuPont de Nemours, Inc. (DD), the investment case presents a significant conflict between strong momentum and weak fundamentals.

Overall Analysis

Technically, DD is exhibiting exceptionally strong bullish momentum, significantly outperforming the market. However, this price action is disconnected from its underlying fundamentals. The company faces substantial profitability challenges, with recent quarters showing revenue volatility and negative net income. This results in an extremely high valuation based on earnings metrics, suggesting the stock is priced for a rapid and significant recovery that has not yet materialized in its financials. While the company maintains a strong balance sheet with low debt, operational efficiency metrics are weak, and the stock's high beta indicates elevated volatility risk.

Buy Recommendation

A buy recommendation is difficult to justify at the current price. The stock's impressive rally appears to be running far ahead of its financial performance, creating a high risk of a pullback if earnings do not catch up to market expectations. While the strong technical momentum could persist in the short term, the combination of negative earnings, concerning valuation multiples, and operational inefficiencies makes it a highly speculative bet. Investors should wait for clear evidence of sustained profitability improvement before considering a position.

*Note: This is not investment advice, for reference only.*

RockFlow Model Forecast: Three Scenarios for 2026

Based on the provided analysis, here is a 12-month outlook for DuPont (DD):

The primary catalyst for DD over the next year is the potential for its operational performance to catch up with its strong price momentum; evidence of sustained revenue stabilization and a return to profitability would be needed to justify the current valuation. Key risks are substantial, centered on the stark disconnect between its bullish technicals and weak fundamentals—specifically, volatile revenues and negative earnings create a high risk of a sharp correction if the expected financial recovery fails to materialize. Without a clear analyst target price, the outlook is highly uncertain; investors should anticipate significant volatility, with the stock's high beta suggesting potential for large price swings in either direction depending on quarterly earnings results.

Wall Street Consensus

Most Wall Street analysts are optimistic about DuPont de Nemours, Inc.'s 12-month outlook, with consensus target around $50.24, indicating expected upside potential.

Overall, DD has investment potential but also faces challenges. Here are key factors to weigh before investing.

DD has demonstrated exceptionally strong bullish momentum, significantly outperforming the broader market over recent months.

The stock has delivered impressive short-term gains, rising 19.34% over one month and 25.4% over three months, substantially outperforming the market by approximately 25% during the latter period. This performance exceeds what would typically be expected given its beta of 1.16, indicating particularly robust upward momentum.

Currently trading at $51.15, DD sits near the upper end of its 52-week range, approximately 3% below its peak of $52.66. While not technically overbought, the proximity to the yearly high following such substantial gains suggests the stock may be approaching a resistance level, especially considering its maximum drawdown of -34.62% demonstrates significant historical volatility.

1. Revenue & Profitability DD experienced substantial revenue volatility between Q3 and Q4 2025, with Q4 revenue declining to $1.69 billion from Q3's $3.07 billion. The company posted negative net income in both quarters (-$126 million in Q4), with net profit margins remaining negative (-7.4% in Q4). Operating margins also deteriorated significantly from 17.8% in Q3 to just 13.4% in Q4, indicating profitability challenges despite a respectable gross margin of 31.1%.

2. Financial Health DD maintains a strong liquidity position with a current ratio of 2.42 and quick ratio of 1.91, though its cash ratio of 0.33 suggests modest cash holdings relative to current liabilities. The company's debt ratios are conservative, with a low debt-to-equity ratio of 0.23 and total debt-to-capitalization of just 18.7%. However, the cash flow to debt ratio remains weak at 0.022, indicating limited cash generation relative to debt obligations.

3. Operational Efficiency Operational efficiency metrics show mixed results, with negative returns on assets (-0.58%) and equity (-0.91%) reflecting profitability challenges. The asset turnover ratio of 0.078 indicates suboptimal utilization of assets to generate revenue. The cash conversion cycle of 102 days suggests working capital management could be improved, though inventory turnover of approximately 1.0 and receivables turnover of 1.01 appear reasonable for the industry.

Based on the available data, DD appears to be significantly overvalued based on earnings metrics. The trailing PE ratio of 243.48 is extremely high, indicating the market price is a large multiple of its past earnings. This is compounded by a negative forward PE and a negative PEG ratio, which signals that the company is not expected to generate positive earnings growth in the near term. The high EV/EBITDA multiple of 123.8 further supports a concerning valuation from a cash flow perspective.

A peer comparison using industry averages is not possible with the information provided. However, the price-to-book (PB) ratio of 0.89 suggests the stock is trading below its accounting book value, which could be a point of relative value. Despite this, the extreme multiples on earnings-based metrics (PE, EV/EBITDA) overwhelmingly suggest a premium valuation that is difficult to justify without significant future profitability improvements.

Based on the provided metrics, DD carries elevated volatility risk compared to the broader market. Its beta of 1.16 indicates it is 16% more volatile than the market, meaning it tends to amplify both gains and losses. This heightened sensitivity is further evidenced by a significant one-year maximum drawdown of -34.62%, suggesting stockholders have experienced substantial peak-to-trough declines during recent market downturns.

Regarding other risk factors, the notable absence of reported short interest is a positive signal, implying a lack of significant speculative betting against the stock's price. However, the lack of provided data on liquidity (such as average trading volume or bid-ask spread) makes a full assessment difficult; low liquidity could pose a challenge for entering or exiting large positions without impacting the stock's price.