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DuPont de Nemours, Inc. DD benefits from its innovation-driven investment, productivity actions and the acquisitions of the Spectrum Plastics Group and Donatelle Plastics amid headwinds from weaker demand in specific businesses.
DD’s shares are down 2.3% in a year compared with the Zacks Chemicals Diversified industry’s 12.3% decline.
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Let’s find out why DD stock is worth retaining at the moment.
DuPont Gains on Productivity, Innovation & Acquisition
DuPont remains focused on driving growth through innovation and new product development. Its innovation-driven investment is focused on several high-growth areas. DD remains committed to driving returns from its R&D investment.
The company, in August 2023, completed the buyout of a leading manufacturer of specialty medical devices and components, Spectrum Plastics Group, from AEA Investors for $1.75 billion. The acquisition strengthened DuPont’s existing position in stable and fast-growing healthcare end markets. It is also in sync with its focus on high-growth, customer-driven innovation for the healthcare market.
The buyout of Donatelle Plastics also enhances DD’s exposure in healthcare, expanding its expertise in the medical device market segments. The acquisition introduces complementary advanced technologies and capabilities, such as medical device injection molding, liquid silicone rubber processing, precision machining, device assembly and tool building.
DuPont is also benefiting from cost synergy savings and productivity improvement actions. The benefits of its structural cost actions are expected to be realized in 2024. DD also continues to implement strategic price increases in the wake of cost inflation. These actions are likely to support its results. DuPont is also executing additional restructuring actions and expects annualized cost savings of $150 million from these measures.
DuPont, in May 2024, announced a strategic plan to separate into three distinct, publicly traded companies to unlock value for shareholders and enhance operational focus. The proposed separations of the Electronics and Water businesses will be executed in a tax-free manner for DuPont shareholders, resulting in New DuPont, Electronics and Water as independent entities. Each company will benefit from increased agility and focus within their respective industries while maintaining strong balance sheets and attractive financial profiles. All three resulting companies are anticipated to have strong balance sheets and sufficient capitalization to pursue future growth opportunities.