Summary
- Corteva, Inc. operates in the agriculture sector offering Seed and Crop protection.
- With the outlook for crop production steady, the company looks to improve its earnings by reducing costs and raking in volumes.
- Reasonable valuation and generous dividend yield are other attractive features of the company.
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The stock market is filled with individuals who know the price of everything, but the value of nothing. – Phillip Fisher
There is good news for shareholders invested in Corteva Inc. (CTVA). Bank of America has issued a Buy call, a double upgrade from Sell, amidst an improved outlook in the agriculture sector. The stock is looking strong at the current level and is expected to generate higher revenues, all while keeping costs under check. For a stock that beat estimates in the last quarter, there are several positive developments that have the potential to swing the momentum in its favor.
Factors determining the revenue and income
It should be noted that Corteva has posted strong growth in revenue after a weak show in the second half of 2019. This was partly due to pressure on commodity prices along with the uncertainty revolving around the trade war between the US and China. A look at the last quarter results should raise optimism about the company. Operating in the agriculture sector ensures that it is somewhat insulated from the volatility instilled by the pandemic – after all, people will need to eat regardless of an economic shutdown. Grocery demand has skyrocketed as more people eat from home, however.
Looking at the geographical distribution also gives us a picture that there is a good level of diversification and it tells us how the company remained resilient as the pandemic spread across continents in phases.
In terms of the production output across the globe, there is not much of a change that is expected in terms of volume. This can be estimated from the latest circular on World Agricultural Production by the United States Department of Agriculture (USDA).
