The merger of Dow and DuPont (DWDP) is now completed and the investment case is entering into its 3rd phase. With the stock up +77% on a split-adjusted basis since our last analysis, the question is - "Does today's price adequately reflect the remaining synergies to be realized as the company enters into its final stage of transformation- value-generating spin-offs? "
Below, we provide the following:
Updates on the sustainable free cash flow levels of DWDP, considering recent operational improvements. Compare the spin-offs targeted margin structures to their peer group adjusting margins for a different allocation of the business units. Calculate the new sustainable free levels based on management's stated timeline for reaching their margin targets.
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