Citi names DuPont top chemicals pick, sees earnings support from electronics, FX

Published 03/07/2025, 14:32
© Reuters.

Investing.com -- Citigroup named DuPont (NYSE:DD) its top pick among North American specialty chemical stocks given an expected stability in second-quarter results and support from foreign exchange gains and improved margin trends in electronics.

Citi placed the stock on a 90-day watch for potential upside, noting investor focus is likely to build ahead of DuPont’s planned separation into two units, Qnity and “RemainCo,” with investor events scheduled for September and the split set for November.

The bank made only minor adjustments to second-quarter estimates but raised full-year 2025 EBITDA by about 1%, helped by stronger expected performance in electronics and moderate sales improvements in water and healthcare.

Tariff-related headwinds of around $60 million are not included in DuPont’s guidance, but Citi expects the company may guide toward the upper end of its EBITDA range of $3.325–$3.375 billion.

Citi said overall results for the sector are tracking in line with expectations, with weaker end-markets like autos and electronics showing more resilience than feared.

The recent pause in tariff implementation also helped limit disruption.

Estimates for International Flavors & Fragrances (NYSE:IFF) and Ecolab (NYSE:ECL) were also revised modestly higher, mainly due to FX effects.

Ecolab is expected to meet second-quarter guidance, while IFF’s longer-term outlook depends on execution in food ingredients and a return to mid-single-digit sales growth.

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