Valued at a market cap of $41.2 billion, Corteva, Inc. (CTVA) operates in the agriculture business and develops and supplies germplasm and traits in corn, soybean, and sunflower seed markets. The Indianapolis, Indiana-based company also supplies products to enhance crop health and protect crops against weeds, insects, and other pests and diseases. It is expected to announce its fiscal Q3 earnings results after the market closes on Wednesday, Nov. 6.
Ahead of this event, analysts project the agricultural chemical company to report a loss of $0.31 per share, higher by 34.8% from a loss of $0.23 per share in the year-ago quarter. The company has consistently beaten Wall Street's bottom-line estimates in the last four quarters.
Its adjusted earnings of $1.83 per share in the last quarter outpaced the consensus estimates by 5.2% and increased 14% from a year ago. The Q2 EPS surprise can be attributed to the company’s 500 bps expansion in the seed segment’s operating EBITDA margin, primarily driven by price execution, reduction of net royalty expense, and ongoing cost and productivity actions. This was partially offset by a 365-bps decline in the crop protection segment’s operating EBITDA margin.
For fiscal 2024, analysts expect CTVA to report an EPS of $2.66, down 1.1% from $2.69 in fiscal 2023. Nevertheless, EPS is expected to grow 24.8% year-over-year to $3.32 in fiscal 2025.
Shares of CTVA have gained nearly 24% on a YTD basis, outperforming both the S&P 500 Index's ($SPX) 22.7% rise and the Materials Select Sector SPDR Fund’s (XLB) 12.2% return over the same period.
CTVA released its Q2 earnings results on Jul. 31. Along with its adjusted earnings, its revenue of $6.11 billion slightly surpassed the Wall Street estimates of $6.1 billion. However, the stock plunged 5.5% in the following trading session as it lowered its full-year 2024 revenue and operating EBITDA guidance. A slight 1% annual increase in revenues and flat volume growth as crop protection growth offset lower seed volumes might have further dampened investor confidence.
Analysts' consensus view on Corteva’s stock is moderately optimistic, with a "Moderate Buy" rating overall. Among 19 analysts covering the stock, 12 recommend a "Strong Buy," two suggest a "Moderate Buy," and five indicate a “Hold.” This configuration is less bullish than three months ago, with 13 analysts suggesting a "Strong Buy."
The average analyst price target for CTVA is $63.28, indicating a 5.8% potential upside from the current levels.
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