Published: Thursday, November 6, 2025 · 7:24 PM | Updated: Thursday, November 6, 2025 · 7:24 PM
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DuPont shares took a breather Thursday after a scorching four-session rally. The reason? There was some noise around the quarterly numbers due to this weekend’s spinoff of Qnity Electronics and the previously announced divestiture of the Aramids business. Still, we see plenty to like heading into next year. Net sales at DuPont in the third quarter rose a little more than 7% year over year to $3.07 billion, topping estimates of $2.9 billion, according to LSEG. Adjusted earnings per share came in at $1.09, ahead of the $1.06 consensus estimate, LSEG data showed. DD YTD mountain DuPont YTD Shares of DuPont dropped roughly 1% in Thursday afternoon trading, which would break a winning streak that has seen the stock up more than 12% since Friday’s close and trading near 52-week highs. We waited a long time for DuPont to exit so-called spin purgatory . So, in Wednesday’s Homestretch, we said we would have booked some profits if not for our trading restrictions. Reflecting our intentions , we downgraded the stock to our 2 rating. On Wednesday, we also adjusted our DuPont price target to $44 per share, implying 11% upside. Bottom line While the quarter was solid, there were a lot of moving parts that confused analysts. Wall Street estimates relating to DuPont’s IndustrialCo segment, the portion of the operation that remains following the Qnity spinoff, did not appear to reflect the previously announced divestiture of the Aramids business, which was reported as discontinued operations. The Aramids brands include Kevlar body armor and Nomex fire-resistant fabric. Outside of all that, the underlying fundamentals of the new DuPont look strong. Overall sales were up 6% organically, driven by increases of 7% in the U.S. and Canada, 7% in the Asia Pacific region, and 6% in both the Europe, the Middle East and Africa (EMEA) region and Latin America. Organic sales growth numbers are derived solely from a company’s business operations. Operating EBITDA – earnings before interest, taxes, depreciation – advanced 6% year over year as organic growth and productivity gains were partially offset by growth investments. Earnings were flat year over year as higher segment profits were offset by an increase in taxes. Transaction-adjusted free cash flow was also a bright spot, representing 126% of adjusted earnings. Why we own it With its electronics business now separated, DuPont is in a position to approach the business with increased focus. As the team executes from quarter to quarter, we think the more streamlined nature of the company’s portfolio will allow the stock to re-rate to a valuation more in line with its mult-industry peers. Competitors: 3M , PPG Industries , Veralto Portfolio weighting: 1.69% Most recent buy: Aug. 5, 2025 Initiated: Aug. 7, 2023 Regarding capital allocation, with the Qnity separation now complete, DuPont’s board authorized a new $2 billion share repurchase program, with $500 million of that earmarked for an accelerated share repurchase to be “launched immediately.” Given DuPont’s post-Qnity spin market cap stands at about $16 billion, that $2 billion buyback amounts to a cash return to shareholders of a healthy 12.5%. Additionally, the board declared a quarterly dividend of 20 cents per share, in line with management’s targeted 35% to 45% payout ratio. Going forward, the new DuPont is in a strong position as end market demand remains resilient and management can now operate with even more focus — points we also covered in our previous deep-dive into the spin. Throw in the benefit of the share repurchase, and we think DuPont stock continues to climb higher as we look to 2026. Quarter commentary Since the Qnity spin happened after the close of the third quarter, DuPont still reported the IndustrialCo and ElectronicsCo segments as it normally did before the separation. IndustrialCo, which makes up the new DuPont, reported 4% organic revenue growth. Within the segment, health care and water technologies recorded a high-single-digit organic sales increase on the back of growth in both sub-segments. On the release, the team said, “Volume gains were driven by growth for medical packaging and biopharma, and continued strength in reverse osmosis and ion exchange,” which are water treatment processes. Diversified industrials realized a low-single-digit increase in organic sales as “growth in industrial technologies was partially offset by continued softness in construction markets.” ElectronicsCo had a strong showing for its final quarter as a part of DuPont, with sales increasing 10% year over year on an organic basis. The results here now reflect the operations at Qnity, which began trading as its own individual public company Monday. Within the segment, semiconductor technologies increased high single-digits on an organic basis, thanks to “ongoing end-market demand strength, due to advanced nodes and AI technology applications,” the company said. Interconnect solutions, meanwhile, realized a low-teens percentage organic sales increase, “reflecting continued demand strength from AI-driven technology ramps, as well as content and share gains.” Qnity management will hold a business update call Thursday afternoon at 4:30 p.m. ET. In the spin, we got one Qnity share for every two DuPont shares we owned. We plan to keep both stocks for now. On DuPont’s post-earnings conference call, CEO Lori Koch addressed some of the changes being made at the new DuPont, including the introduction of a core set of enhanced key performance indicators (KPIs) aligned with management’s focus on safety, quality, delivery, and cost. These new KPIs are “embedded in a refreshed set of management standards, which has added more visibility, rigor, and structure to ensure we achieve our business objectives on commercial excellence,” Koch said. Management has also taken steps to strengthen the pipeline. “We have designed a more transparent, data-driven process which links demand generation, opportunity qualification, and conversion metrics to deliver against our growth targets,” Koch added. “Specifically, within our water business, we have taken a regional approach to the rollout and have improved pipeline rigor in North America and Europe, leading to a sizable improvement in our opportunity funnel. We plan to launch in Asia later this quarter.” The team has refreshed its operational equipment effectiveness and reliability toolkit, with Koch seeing “reductions in unplanned downtime and improving our maintenance spend and wrench time on capital allocation.” Given Thursday’s earnings report and our expectation of continued quarterly execution, DuPont is now well positioned for a valuation re-rating to a level more in line with its multi-industry peers. On the call, Koch said she wanted to make sure everyone knew that the new DuPont is not just a chemical company but a “significantly transformed” multi-industrial. “We’ve got the financial performance that is right in line with the multi-industrials. So, we would expect that we would continue to re-rate up towards more of that multi-industrial multiple.” Guidance According to DuPont, “guidance reflects the previously announced divestiture of the Aramids business and separation of the electronics business, Qnity, as discontinued operations.” The consensus estimates from Wall Street analysts do not appear to have been updated to reflect these changes. For the full year, management is now forecasting sales of about $6.84 billion, down from the prior target of about $6.87 billion, reflecting a lower than previously expected tailwind from currency dynamics. Operating EBITDA guidance, on the other hand, was revised higher, with the team now forecasting about $1.6 billion, up from the $1.58 billion previously forecast. The increase reflects a $10 million benefit from improved business performance, net of currency headwind, and a $15 million benefit thanks to corporate cost reductions. Full-year adjusted EPS are expected to come in at about $1.66. As for the current (fourth) quarter, management is expecting to deliver sales of about $1.69 billion, operating EBITDA of about $385 million, and EPS of about 43 cents. At the segment level, management expects the health care and water technologies segment to realize about 2% organic growth. For diversified industrials, the team expects sales to be down about 3%. Year-over-year growth for both segments in the fourth quarter includes a 2-percentage-point headwind as some customers pulled forward orders into the third quarter due to operational disruptions resulting from the Qnity separation. Adjusting for this, the guide for health care and water technologies would be up about 4%, with diversified industrials down about 1% year over year. (Jim Cramer’s Charitable Trust is long DD, Q. See here for a full list of the stocks.) 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