By Al Root
After a decade of transactions, DuPont de Nemours could be ready to join Berkshire Hathaway and Danaher in the special category of stocks known as "compounders."
Compounder refers to a company that, year after year, increases sales and earnings at above-market rates, typically as a result of a combination of prudent management and smart bolt-on acquisitions. It is usually a recipe for years of solid share gains.
That's what the new DuPont is shooting for, according to Deutsche Bank analyst David Begleiter, who reiterated his buy rating on DuPont after it completed the spinoff Qnity on Nov. 1. "The spinoff of Qnity marks the end of a 10-year journey for DuPont that began with the December 2015 announcement of a merger of equals with Dow Chemical."
So far, wealth creation has been elusive. The companies that have emerged from DuPont, DowDuPont, and Dow, Inc. over the past decade-plus include Chemours, Corteva, Qnity, and, of course, the current iterations of Dow and DuPont.
The market value of those five is roughly $94 billion. DowDuPont had a market value closer to $150 billion in 2019, ahead of the Dow-DuPont split.
The stock market, however, doesn't care all that much about what happened years ago. It is forward-looking -- and investors like what they see. Coming into Tuesday trading, DuPont stock, adjusted for the Qnity spin, was up about 21% this year. On Tuesday, shares rose 0.8%; the S&P 500 and Dow Jones Industrial Average gained 0.9% and 1.4%, respectively.
And Begleiter sees even better days ahead. DuPont will be growing off a smaller base while serving industrial and water markets with brands such as Tyvek and TapTec for water filtration. Sales in 2026 are expected to be about $7 billion, down from 2024 sales, pre-spin, of more than $12 billion.
"What is left of DuPont is a company of modest size...though of high quality...with solid growth...strong free cash flow potential...and compelling valuation," he wrote.
It's also cheap, especially for a compounder. DuPont trades for about 11 times Begleiter's estimate of 2026 earnings before interest, taxes, depreciation, and amortization, or Ebitda. Industry peers trade for about 15.5 times. Earnings per share should grow at 8% to 10% a year. Higher growth industrial and chemical companies trade for closer to 19 times Ebitda.
Begleiter's price target is $46 a share, up about 20% from recent levels, which puts him in the middle of the pack on Wall Street. The average analyst price target for DuPont stock is about $47, while 81% rate shares Buy. The average Buy-rating ratio for stocks in the S&P 500 is about 55%.
Maybe the next few years are DuPont's time to shine.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
November 26, 2025 16:58 ET (21:58 GMT)
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