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Turnaround Letter
Out-of-Favor Stocks with Real Value

January 13, 2021

Moving DuPont (DD) to Sell.

DuPont (DD) – moving to Sell
With the pending sale of its Nutrition & Biosciences (N&B) unit, DuPont shares have surged past our 75 price target (currently trading mid-day at about 82.50). The actual transaction has complicated mechanics, including an exchange into N&B shares at a discounted and yet-to-be-determined exchange ratio, followed by their conversion into International Flavors & Fragrances (IFF) shares.

The net effect is that DuPont retires a sizeable percentage of its shares and reduces its debt. However, the post-transaction valuation looks full and discounts a fairly prosperous future. We are moving DD shares to a Sell, with an estimated 85% total return since our March 2020 initial Buy recommendation.