Don't Take a Position in Corteva Stocks Without Knowing Its Fundamentals!

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.

The above analysis is intended for educational purposes only and was performed on the basis of publicly available data. It is not to be construed as a recommendation to buy or sell any security. Any buy, sell, or other recommendations mentioned in the article are direct quotations of consensus recommendations from the analysts covering the stock, and do not represent the opinions of Market Inference or its writers. Past performance, accounting data, and inferences about market position and corporate valuation are not reliable indicators of future price movements. Market Inference does not provide financial advice. Investors should conduct their own review and analysis of any company of interest before making an investment decision.