Wall Street analysts forecast that Corteva, Inc. (CTVA) will report quarterly earnings of $0.87 per share in its upcoming release, pointing to a year-over-year decline of 2.3%. It is anticipated that revenues will amount to $4.51 billion, exhibiting an increase of 0.4% compared to the year-ago quarter.The current level reflects an upward revision of 1.4% in the consensus EPS estimate for the quarter over the past 30 days. This demonstrates how the analysts covering the stock have collectively reappraised th ...

After revisiting Corteva (NYSE: CTVA ) following its Q4 earnings and more importantly the recent macro events surrounding tariffs and commodity markets, I’m upgrading the stock from Buy to Strong Buy. While the core business fundamentals have not changed dramaticallyI am an investment professional with a background in both equity and real estate markets. I specialize in identifying long-only opportunities that offer safe and growing dividends, aiming to outperform the broader market on a risk-adjusted retur ...

Core Industry Insights - The Zacks Agriculture – Operations industry is benefiting from ongoing innovation and increasing consumer demand for health-focused products, particularly alternative proteins [1][2] - Advancements in food processing technologies, improved grain-handling methods, and expanded storage capacity are supporting industry momentum [2] - The U.S. Department of Agriculture projects agricultural exports of $170.5 billion for fiscal 2025, driven by stronger grain and feed exports [6] Company Highlights Mission Produce - Engaged in sourcing, farming, packaging, marketing, and distribution of avocados, mangoes, and blueberries, Mission Produce has optimized per-unit margins through effective integration of sales and sourcing operations [19][20] - The Zacks Consensus Estimate for Mission Produce's fiscal 2025 earnings has increased by 19% in the past 30 days, although sales and earnings are expected to decline by 6.6% and 32.4% respectively from the previous year [21] Corteva - Corteva is positioned for above-market growth through its innovative product pipeline and strong market demand for naturally derived products [22] - The Zacks Consensus Estimate for Corteva's 2025 earnings suggests growth of 1.7% and 15.2% respectively from the year-ago period [23] Dole - Dole is expected to benefit from improved logistical efficiencies and a healthier supply-demand balance, which has led to better pricing conditions in Europe [24] - The Zacks Consensus Estimate for Dole's 2025 earnings suggests a growth of 4.7% from the previous year [25] Adecoagro - Adecoagro operates in farming, dairy, sugar, ethanol, and energy production, benefiting from high asset flexibility in a volatile market [26] - The Zacks Consensus Estimate for Adecoagro's 2025 earnings suggests declines of 3.2% and 41.1% respectively from the previous year [27] Industry Challenges - The industry faces challenges such as fluctuating commodity prices, rising input costs, trade uncertainties, and increasing operational expenses, which impact productivity and profitability [3][11] - Companies are managing higher selling, general and administrative expenses due to performance-related compensation and technology investments [12] Market Performance - The Zacks Agriculture – Operations industry has underperformed the broader Zacks Consumer Staples sector and the S&P 500, with a collective decline of 12.2% over the past year [16] - The industry is currently trading at a forward P/E ratio of 13.34X, compared to the S&P 500's 20.05X and the sector's 17.18X [17]

Core Viewpoint - Corteva, Inc. is set to release its first quarter 2025 earnings on May 7, 2025, with a live webcast presentation scheduled for May 8, 2025, at 9:00 a.m. Eastern Time [1]. Group 1 - The earnings release will be available via press release and on the company's website [1]. - A slide presentation accompanying the webcast will be posted on the Investor Events and Presentations page [2]. - A replay of the webcast will be accessible until May 8, 2026 [2]. Group 2 - Corteva, Inc. is a global pure-play agriculture company focused on delivering innovative solutions to address significant agricultural challenges [3]. - The company utilizes a unique distribution strategy and offers a balanced mix of seed, crop protection, and digital products and services [3]. - Corteva aims to maximize productivity for farmers while collaborating with stakeholders in the food system to ensure sustainable progress [3].

Core Viewpoint - The agricultural macro environment is stabilizing post-Russia-Ukraine war peak, with expectations for improved conditions in Spring 2025, driven by higher corn acreage and a short Fall application window, but a drift towards normalized levels is anticipated later this year [1] Company Summaries Corteva, Inc. (CTVA) - Coverage initiated with a Buy rating and price forecast of $71, highlighting strong seed and crop protection business poised to benefit from significant cost tailwinds in 2025 [2] - The company's focus on R&D compared to crop protection provides substantial pricing power, allowing it to maintain strong pricing even during down-cycles [2] FMC Corporation (FMC) - Coverage initiated with a Buy rating and price forecast of $51, noted as the only pure-play crop protection firm in the group [3] - Promising post-patent strategy for Rynaxypyr and an R&D pipeline expected to yield dividends by 2027+ [3] - Market undervaluation of potential growth from new product launches in 2026/27 and beyond, with current consensus estimates below FMC's 2027 guidance targets [4] Mosaic Company (MOS) - Coverage initiated with a Buy rating and price forecast of $31, favored due to phosphate's favorable supply-demand outlook heading into 2025 [4] - Limited capacity growth and rising demand from farmers and LFP EV batteries are key factors [5] - Potential for improved capacity utilization and margin boosts during a period of strong phosphate stripping margins, provided production disruptions are avoided [5]

Core Insights - Corteva, Inc. will have its CEO Chuck Magro and CFO David Johnson speak at the 2025 Bank of America Global Agriculture & Materials conference on February 26, 2025, at 9:00 a.m. Eastern Time [1] - The presentation will be available via live webcast and can be accessed through the Corteva Investor Relations website, with a replay available for 24 hours post-presentation until February 27, 2026 [2] Company Overview - Corteva, Inc. is a global pure-play agriculture company focused on delivering innovative solutions to address significant agricultural challenges [3] - The company utilizes a unique distribution strategy and offers a balanced mix of seed, crop protection, and digital products and services, aiming to maximize productivity for farmers [3] - Corteva is committed to enriching the lives of producers and consumers while ensuring sustainable progress for future generations [3]

Business Strategy and Operations - The company began accelerating the ramp-up of the Enlist E3 trait platform in its soybean portfolio in 2019, significantly reducing the use of Roundup Ready 2 Yield and Roundup Ready 2 Xtend traits starting in 2021[40] - The company has a unique Pioneer agency model that allows direct sales to farmers, providing real-time insights into customer ordering decisions[42] - Corteva's supply chain strategy includes managing global supplies of active and intermediate ingredients with a robust and flexible global footprint to support future growth[51] - The company focuses on customer-driven innovation to enhance seed product quality and has invested in data digitization and analytics to improve responsiveness to customer needs[44] - The Crop Protection segment is a leader in global herbicides, insecticides, nitrogen stabilizers, and biologicals, contributing to overall crop health[46] - The company operates 96 production sites globally, with 47 in North America, 20 in EMEA, 21 in Latin America, and 8 in Asia Pacific[172] - The company has a significant presence in the seed business, with 63 seed production sites globally[172] Financial Performance - The company reported net sales of $16,908 million for the year ended December 31, 2024, a decrease of 2% compared to $17,226 million in 2023, driven by a 1% decrease in price and a 3% unfavorable currency impact, partially offset by a 2% increase in volume[210] - Cost of goods sold (COGS) totaled $9,529 million, down from $9,920 million in 2023, primarily due to favorable currency effects and ongoing cost and productivity actions[210] - Income from continuing operations after income taxes was $863 million, compared to $941 million in 2023[210] - Operating EBITDA was $3,376 million, slightly down from $3,381 million in 2023, primarily due to competitive pricing in Crop Protection and continued investment in Seed R&D[210] - The company returned approximately $1.5 billion to shareholders in 2024 through share repurchase programs and common stock dividends[210] - The company expects to contribute approximately $40 million to its pension plans other than the principal U.S. pension plan, and about $105 million for its other post-employment benefit plans in 2025[132] - Corteva's liquidity could be impaired if it is unable to raise capital through the capital markets or short-term debt borrowings, which could negatively affect its financial condition[128] Competition and Market Environment - The company faces intense competition in the seed germplasm and crop protection market, competing with major players like BASF, Bayer, FMC, Syngenta, and ChemChina[68] - Corteva faces intense competition with increasing product availability and the risk of revenue loss from patent expirations, which could adversely affect its business[100] - The company is subject to extensive environmental regulations, which could result in significant costs or liabilities due to compliance failures or changes in regulations[93] - Climate change and unpredictable weather factors could negatively impact Corteva's sales and earnings, affecting crop protection product demand and seed supply chains[97] - Disruptions in the global economy due to geopolitical conflicts, such as the Russia-Ukraine war, have negatively impacted Corteva's supply chains and increased costs for materials and transportation[103] Regulatory and Compliance Challenges - Regulatory approval processes for genetically modified organisms (GMOs) are becoming increasingly complex, leading to longer approval timelines and higher development costs[71] - The company must periodically renew its approvals for biotechnology and crop protection products, which can be lengthy and costly, impacting sales and profitability[83] - The company continues to invest in keeping regulatory dossiers current and responding to evolving standards, which is essential for maintaining market access[71] - Concerns regarding the safety of biotechnology products may affect public perception and regulatory approvals, impacting sales and operational results[91] - The regulatory environment may be influenced by non-governmental organizations and public sentiment, potentially leading to increased scrutiny and compliance costs[85] Risk Management - The company actively manages risks associated with cybersecurity and supply chain disruptions, which could materially affect its operations and reputation[114] - The company faces risks from various litigation matters, including product liability and environmental lawsuits, which could materially affect its financial results[119] - Corteva's reliance on third parties for raw materials and commercialization could negatively impact its ability to develop and market new products[122] - The company anticipates that adverse outcomes in litigation could result in losses not fully covered by insurance, potentially affecting its financial results[119] - The company is engaged in a dispute resolution process with DuPont regarding tax indemnification liabilities, which could affect its financial standing[157] Employee and Corporate Culture - The company employs approximately 22,000 employees globally, with a diverse workforce composition across North America (47%), Latin America (21%), EMEA (20%), and Asia-Pacific (12%)[54] - Corteva maintains a strong commitment to inclusion and belonging, with nine global employee business resource groups supporting diverse employee needs[58] - The company has implemented safety programs and management practices to promote a culture of safety for its employees and the environment[56] Research and Development - Research and Development (R&D) expenses increased to $1,402 million (8% of net sales) in 2024 from $1,337 million (8% of net sales) in 2023, reflecting higher salaries and headcount[235] - The increase in R&D expenses in 2023 was also attributed to spending on field, lab, and facilities, as well as third-party research costs[236] - The successful development and commercialization of pipeline products are crucial for the company's growth, utilizing advanced breeding technologies and biotechnology[86] Shareholder Actions - The company repurchased 4,070,529 shares in the fourth quarter of 2024 at an average price of $61.42 per share, with a remaining buyback authorization of $3.5 billion[198] - The company authorized a $3 billion share repurchase program on November 19, 2024, with no expiration date[222] - In 2024, the company paid a total dividend of $0.66 per share, an increase from $0.62 in 2023[197]

Group 1 - Corteva, Inc. reported mixed fourth-quarter results, with adjusted earnings of 32 cents per share, exceeding market estimates of 31 cents per share, while quarterly sales were $3.978 billion, falling short of estimates of $4.008 billion [1][2] - The CEO highlighted that despite challenging market conditions, Corteva generated strong cash from operations and achieved record results in the fourth quarter [2] - For FY25, Corteva projects operating earnings between $2.70 to $2.95 per share and net sales ranging from $17.2 billion to $17.6 billion [2] Group 2 - Following the earnings announcement, analysts adjusted their price targets for Corteva, with Keybanc raising it from $68 to $70, Oppenheimer from $70 to $72, and RBC Capital from $72 to $73 [3][4] - Corteva shares experienced a slight increase of 0.1%, trading at $62.42 [2]

Financial Data and Key Metrics Changes - In Q4 2024, organic sales increased by 13% year-over-year, with seed sales up 16% and crop protection up 11% [37] - Operating EBITDA for the full year 2024 was approximately $3.4 billion, essentially flat compared to the prior year, with an operating EBITDA margin of 20%, which is more than 30 basis points higher [41][44] - Free cash flow improved by almost $500 million in 2024, totaling about $1.7 billion, representing a 50% conversion rate on EBITDA [16][63] Business Line Data and Key Metrics Changes - The seed business maintained strong performance, with Pioneer ranked as the number one corn and soybean brand in the US, gaining corn market share despite a reduction in planted area [14] - Crop protection saw double-digit organic sales growth and an 800 basis points margin improvement in Q4, largely driven by demand in Brazil [13][62] - Enlist E3 soybeans reached 65% market penetration, with sales of the Enlist system, including herbicide offerings, totaling $1.9 billion in 2024 [15] Market Data and Key Metrics Changes - Global consumption of corn and soybeans reached record levels, with strong production contributing to improved farmer margins in key markets like the US and Brazil [19][20] - The corn market is currently tight, with the stocks-to-use ratio being the tightest in over a decade, excluding China [21] - The crop protection industry is showing signs of stabilization, with channel inventory levels becoming more balanced globally [22] Company Strategy and Development Direction - The company aims for sustained value creation through a financial framework targeting $1 billion in incremental net revenues from 2025 to 2027, focusing on increased out-licensing income, ramp-up of crop protection products, and biological growth [33][36] - The strategy includes a commitment to productivity and cost improvement initiatives, with a goal of achieving $1 billion in gross productivity, cost, and deflation benefits across seed and crop protection [34] - The company plans to launch 300 new seed hybrids and varieties, emphasizing a price-for-value strategy to enhance yields [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the 2025 outlook, expecting another year of top and bottom-line growth with meaningful margin expansion despite currency headwinds [25][54] - The operational plan remains intact, with expectations of mid-single-digit organic sales growth in crop protection and continued strong demand for seed technology [31][50] - Management highlighted the importance of farmer margins improving due to strong production and demand, which is expected to drive increased planted areas, particularly for corn [27][71] Other Important Information - The company returned approximately $1.5 billion to shareholders in 2024 through dividends and share repurchases, with a commitment to another $1 billion in share repurchases in 2025 [17] - The company is facing currency headwinds primarily from the Brazilian real and Canadian dollar, which are expected to impact reported results [24][54] Q&A Session Summary Question: How should we think about potential positives evolving into the season versus FX risks? - Management noted that market fundamentals have turned more positive, with expectations for good demand in 2025, particularly for corn and soybeans, and improving farmer margins [71] Question: Can you comment on production costs in crop protection and seed? - Management indicated that crop protection costs were lower than expected due to structural improvements, while seed costs were higher due to previous high-cost inventory that needed to be cleared [78][82] Question: What is the expected cadence of earnings growth across the year? - Management expects slight growth in the first half of 2025 compared to the first half of 2024, with better performance anticipated in the second half [91][95] Question: What drove the significant increase in crop protection EBITDA margins? - The increase was attributed to strong performance in Brazil, new product sales, and cost reductions, with a record quarter for the crop protection business [97][100] Question: Why was the top end of the guidance cut by $200 million? - The reduction was primarily due to currency impacts, with a stronger US dollar affecting the guidance, while the lower end remained unchanged to account for potential risks [104][110] Question: Is there a possibility of separating crop protection from seeds to enhance equity value? - Management stated that while nothing is off the table, the integrated approach of offering both seeds and crop protection provides significant synergies and value to farmers [113][115] Question: What is the outlook for dicamba and its impact on the 2025 plan? - Management confirmed that no upside from dicamba is built into the 2025 plan, but the order book for E3 soybeans is healthy [120][122] Question: Will just-in-time purchasing behavior continue? - Management indicated that this behavior is likely to persist due to economic conditions, and the company is prepared for it moving forward [126] Question: What is driving competitive pressure in seed pricing in Latin America? - Management noted that competitive markets and previous high-cost inventory were factors, but they expect pricing to improve in 2025 with better technology and increased safrinha acres [128][130]

4Q 2024 Earnings Conference Call February 6, 2025 Safe Harbor Regarding Forward-Looking Statements Forward-Looking Statements This presentation contains certain estimates and forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended, which are intended to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, and ...