DuPont Invests in Kevlar to Make $58 Value Bullet Proof
Source: DuPont
DuPont (NYSE:DD) has continued to invest in its growth despite global macro uncertainties increasing in recent months. The company recently announced the start-up of a new $500 million Cooper River Kevlar facility for advanced protective materials. ((DuPont Starts Up $500 Million Kevlar® Facility in South Carolina)) Performance and safety materials division contributes almost 50 percent of DuPont’s stock value, as per our estimate. We believe that this new facility will help DuPont significantly increase its global production of Kevlar brand fiber and help increase DuPont’s performance and safety materials market share over the medium-term, providing upside to the stock. DuPont competes with other major chemical companies such as Dow Chemicals (NYSE:DOW), 3M (NYSE:MMM) and BASF.
Our current price estimate for DuPont stands at $58.45, which is about 30% above its current market price.
Demand from emerging industries to boost performance and safety materials market share
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Kevlar brand fiber combines high strength with light weight to help dramatically improve the performance of a variety of consumer and industrial products like protective gear, gloves, vests, tires and fiber-optic cables.
Last month DuPont was awarded $920 million in damages by a U.S. federal jury after the company sued a South Korean company, Kolon Industries for stealing trade secrets of Kevlar technology used to make Kevlar bulletproof vests. [1] It is reported that KOLON also plans to pursue a separate antitrust case against DuPont, scheduled for trial next March.
We believe DuPont’s investment in the new Kevlar facility will help it meet the demand for advanced protective materials in emerging industries. The new plant is expected to increase overall global production capacity for Kevlar by 40% in two-years and will help increase DuPont’s performance and safety materials market share over medium-term. [1]
You can drag the trend lines in the modifiable chart above to see the impact of these trends on DuPont’s stock value.
See our full analysis for DuPont’ Stock.
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