Corteva, Inc.

Corteva had a strong fourth quarter and managed to deliver an all-around beat. Its organic sales were up 11% compared to the prior year, led by Latin America and North America. Strong organic sales led to $370 million in profitability for the quarter, an increase in the margin of more than 200 basis points. With significant seed and crop protection increases, global pricing increased by 10% over the previous year. Strong demand for new products was the primary factor in the 9% annual increase in crop protection volume. However, Crop Protection volume fell 1% due to the rainy weather and lower pest pressure in some locations, partially offset by demand for new products. Significantly, DSO metrics continue to be strong, benefiting from the robustness of farmer revenues as well as custom collections. Differentiated technology is still in high demand, leading to volume growth in crop protection. The company may also profit from the ongoing capacity development at Spinosyns as it anticipates that the franchise will generate more than $1 billion in revenue in 2023. In addition, they intend to launch Vorceed Enlist corn products. We give Corteva a ‘Buy’ rating with a revised target price.