DuPont preannounced disappointing earnings results before the opening bell Wednesday, sending the stock down roughly 13%. We’re not going to buy that dip. Ahead of next month’s quarterly release, the materials giant said: Sales for the fourth quarter are expected to be about $2.9 billion, short of the $3 billion the Street was looking for, according to estimates compiled by LSEG. Adjusted earnings per share are expected to be between 85 cents and 87 cents, actually a penny above the 85-cent consensus at the midpoint. Operating fourth-quarter EBITDA (earnings before interest, taxes, depreciation, and amortization) is expected to be about $715 million, operating cash flow about $640 million, and adjusted free cash flow is expected to be about $500 million. That compares to estimates, according to FactSet, of $746 million, $573 million and $447 million, respectively. So, cash looks good, but EBITDA is soft. As for a current quarter outlook, the real reason the stock is taking such a hard hit and why we aren’t rushing to scoop up shares just yet, management is forecasting first-quarter sales of roughly $2.8 billion, operating EBITDA of about $610 million, and adjusted EPS in the range of 63 to 65 cents. These forecasts represent across-the-board misses versus Street expectations for sales of $3.04 billion, operating EBITDA of $751 million, and earnings of 88 cents per share. In a glimmer of hope, management said that things should improve sequentially going forward with an expectation for operating EBITDA to increase about 10% versus the first quarter’s level, which given the forecast above, amounts to $671 million. That’s still not great versus expectations of $800 million but in the right direction. Given the slower recovery and impact on 2024 earnings, we are reducing our DuPont price target to $78 per share from $85. As we mentioned in our Caterpillar trade alert, we see no reason to rush in and buy here. To buy back in the mid-60s what we sold in the mid-70s is…
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