Now trading at a price of $59.8, Corteva has moved -1.5% so far today.
Corteva shares moved 0.3% over the last 52 weeks, with a high of $68.43 and a low of $50.03. During this time, the stock outperformed the S&P 500 index by 9.0%. As of January 2022, the company's 50-day average price is $61.0. Corteva, Inc. operates in the agriculture business. The large-cap Industrials company has 21,000 full time employees and is based in Indianapolis, IN. Corteva has returned a 1.0% dividend yield over the last 12 months.
Exceptional EPS Growth with Low Leverage Levels:
| 2019-12-31 | 2020-12-31 | 2021-12-31 | 2022-12-31 | |
|---|---|---|---|---|
| Revenue (MM) | $13,846 | $14,217 | $15,655 | $17,455 |
| Revenue Growth | n/a | 2.68% | 10.11% | 11.5% |
| Gross Margins | 38.1% | 40.2% | 41.1% | 40.2% |
| Gross Margins Growth | n/a | 5.51% | 2.24% | -2.19% |
| Operating Margins | 4.2% | 5.9% | 8.4% | 11.0% |
| Operating Margins Growth | n/a | 40.48% | 42.37% | 30.95% |
| Net Margins | -6.93% | 4.79% | 11.24% | 6.57% |
| Net Margins Growth | n/a | 169.12% | 134.66% | -41.55% |
| Earnings Per Share | -$1.28 | $0.91 | $2.37 | $1.66 |
| EPS Growth | n/a | 171.09% | 160.44% | -29.96% |
| Diluted Shares (MM) | 750 | 751 | 742 | 713 |
| Free Cash Flow (MM) | -$93 | $1,589 | $2,154 | $267 |
| FCF Growth | n/a | 1808.6% | 35.56% | -87.6% |
| Capital Expenditures (MM) | -$1,163 | -$475 | -$573 | -$605 |
| Net Debt / EBITDA | -0.68 | -1.01 | -0.85 | -0.57 |
Corteva Is Reasonably Valued:
Compared to the Industrials sector's average of 20.49, Corteva has a trailing twelve month P/E ratio of 36.0 and, according to its EPS guidance of 3.47, an expected P/E ratio of 17.2. Corteva's PEG ratio is 0.93 based on its 38.8% compound average growth rate of historical and projected earnings per share. However, we believe that it is more prudent to calculate the PEG ratio using the broader market's 5-year expected EPS growth rate of 13.05%, because the growth rate implied by Corteva's past and expected EPS is probably not sustainable. This more prudent approach shows a PEG ratio of 2.76, which suggests that the company's shares are actually overvalued.
However, Corteva is likely undervalued in terms of its equity because its P/B ratio is 1.7 compared to its sector average of 3.78. The company's shares are currently trading 120.7% above their fair value as expressed by Benjamin Graham's formula:
√(22.5 * 4-year average EPS * book value per share) = √(22.5 * 0.92 * 35.466) = $27.1
Despite Corteva's elevated earnings multiple, the company's impressive cash flow trend, decent P/B ratio, and reasonable leverage demonstrate the company may be fairly valued.
Corteva Is the Subject of Mixed Market Indicators:
21 analysts are following Corteva and have set target prices ranging from $60.0 to $87.0 per share. On average, they have given the company a rating of buy. At the current price of $59.8, CTVA is trading -17.91% away from its average analyst target price of $72.85 per share, implying an analyst consensus of some upside potential for the stock.
The company has a very low short interest since 0.9% of the company's shares are tied to short positions. Institutions own 83.1% of Corteva's shares, while the insider ownership rate stands at 0.19%. The biggest shareholder is the Vanguard Group, Inc. with a 12% stake in the company worth approximately $4,917,142,843.
