Dj Corteva Inc. Stock Rises Friday, Outperforms Market

Corteva, Inc. CTVA has been making strategic moves to boost overall growth. The company has been focused on maximizing its shareholders’ value. In its latest announcement, CTVA highlighted its strategy of delivering value to shareholders by addressing the global headwinds such as food security; climate change, and its intensifying weather and pressures from insects, weeds and diseases; and the energy transition from fossil fuels, which is leading to higher demand for biofuels. Corteva looks to address these issues through innovation.

The company’s board has approved a new $3-billion share repurchase authorization, which is effective immediately and does not expire.

More on CTVA’s Latest Announcement

Corteva outlined a new financial framework through 2027: $1 billion in higher net sales from growth platforms, ~$1 billion in cost deflation and productivity gains and nearly $4.5 billion in shareholder returns.

CTVA’s six growth platforms, which are core to the aforesaid framework, have been further defined. The first platform is seed and trait out-licensing to reinforce Corteva’s target to be royalty-neutral by the end of 2028; the second is biologicals to target $1 billion in annual revenues by a decade’s end and boost yields; and the third is new crop protection technologies to keep up with the increasing pressures of insects, weeds and diseases.

The fourth platform is gene editing to take advantage of the highly-advanced capacity in the industry, with major germplasm to change the way the world farms; the fifth is biofuels to cater to increasing fuel demand from the long-haul transportation sector with low-carbon alternatives; and the sixth platform is hybrid wheat, proprietary system with a potential to generate yield advantages of up to 20% in a water-stressed landscape.

Such strategic platforms demonstrate the company’s commitment to constant innovations, along with cost and operational effectiveness. It reinvests 8% of its sales into research and development, which is the equivalent of nearly $4 million per day, to resolve farmers’ most intractable problems.

Details on CTVA’s Share Repurchase Plan

The company’s newly authorized program is in addition to its current $2-billion program, which was declared in September 2022. The existing program had nearly $750 million available as of Sept. 30, 2024.

CTVA’s common stock might be repurchased periodically in open-market or private transactions. The actual timing, number and value of shares to be repurchased under its share repurchase program will depend on several factors like market price of its common stock, general market and economic conditions, suitable legal requirements, and other business considerations and capital uses such as organic growth, dividends and acquisitions.

During the nine months ended Sept. 30, 2024, Corteva bought back $757 million and paid dividends of $340 million. Management anticipates repurchasing roughly $ 1 billion shares in 2024, while cash provided by operating activities from continuing operations is likely to be in the band of $2.1-$2.6 billion. Free cash flow is predicted to be between $1.5 billion and $2 billion.

Earlier, this year the company hiked its dividend as well. Such shareholder-friendly actions, coupled with the latest share repurchase authorization, highlights Corteva’s commitment to boosting its shareholders’ value.

What’s More to Know About CTVA?

Corteva’s shares have gained 22.6% year to date, outperforming the industry’s 10.4% decline.

The company’s strategic initiatives are on track. CTVA’s Crop Protection business has been performing well, buoyed by solid demand for its unique technology and gains from deflation. Corteva looks forward to delivering savings of more than $400 million in 2024.

Recently, the company unveiled a revolutionary breakthrough in wheat, which is a first-of-its-kind, proprietary non-GMO hybrid technology. CTVA’s breakthrough hybrid wheat technology looks to grow yield potentially by 10% with the same amount of land and resources; and more resistant to drought. The company currently carries a Zacks Rank #3 (Hold).

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