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DowDuPont (DWDP) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
Cerner (CERN) reported earnings 30 days ago. What's next for the stock? We take a look at earnings estimates for some clues.

DowDuPont (DWDP) closed the most recent trading day at $55.03, moving -1.56% from the previous trading session. This change lagged the S&P 500's 0.09% loss on the day. Elsewhere, the Dow gained 0.03%, while the tech-heavy Nasdaq lost 0.16%.

Prior to today's trading, shares of the specialty chemicals maker had gained 5.19% over the past month. This has outpaced the Basic Materials sector's gain of 3.78% and the S&P 500's gain of 2.35% in that time.

Investors will be hoping for strength from DWDP as it approaches its next earnings release. On that day, DWDP is projected to report earnings of $0.93 per share, which would represent a year-over-year decline of 16.96%. Meanwhile, our latest consensus estimate is calling for revenue of $20.06 billion, down 6.75% from the prior-year quarter.

DWDP's full-year Zacks Consensus Estimates are calling for earnings of $4.05 per share and revenue of $84.53 billion. These results would represent year-over-year changes of -1.46% and -1.69%, respectively.

Investors might also notice recent changes to analyst estimates for DWDP. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.11% lower within the past month. DWDP is currently a Zacks Rank #4 (Sell).

Investors should also note DWDP's current valuation metrics, including its Forward P/E ratio of 13.79. Its industry sports an average Forward P/E of 13.61, so we one might conclude that DWDP is trading at a premium comparatively.

We can also see that DWDP currently has a PEG ratio of 1.38. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Chemical - Diversified was holding an average PEG ratio of 1.01 at yesterday's closing price.

The Chemical - Diversified industry is part of the Basic Materials sector. This group has a Zacks Industry Rank of 216, putting it in the bottom 16% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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