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Investing.com -- Corteva, Inc. shares were downgraded at KeyBanc on increased uncertainty and limited upside from its planned split into two publicly listed units.
On October 1, Corteva said it would separate its Crop Protection business into a new publicly traded company while spinning off its Seed operations as a separate entity.
Shares of the agricultural company dropped about 7% following the announcement, hitting their lowest level in nearly five months, and are down more than 14% since reports of the breakup first emerged last month.
KeyBanc said it sees limited immediate benefit from the separation, highlighting potential valuation and operational challenges.
The brokerage said shares could struggle in “deal purgatory” until the spin-off, expected in the second half of 2026, as investors may find it difficult to value the crop protection business on its own.
The note also raised concerns about potential dyssynergies from the split, estimating a $150 million impact on 2026 EBITDA compared with management’s $80 million-$100 million assumption.
KeyBanc sees modest upside of about 12% over the next year, with the remaining Corteva expected to trade at a lower EV/EBITDA multiple than the seed spin-off.
The firm added that the separation signals management expects slower growth and lower margins in the crop protection segment, influenced by rising exports of generic products from China and India and broader industry changes.
Despite this, Corteva reiterated its 2025 EBITDA guidance of $3.8 billion and its initial 2026 outlook of around $4.1 billion.
Whereas Jefferies has said Corteva’s current market value can be justified by the seed business alone, giving investors exposure to crop protection and emerging gene-editing technologies “for free.”