JPMorgan has reduced its rating on Corteva to Neutral from Overweight, pointing to valuation concerns even as it nudged its price target slightly higher. The stock was trading down 1.3% at $74 at the time of the bank's action.
The bank used a sum-of-the-parts framework to value Corteva's businesses, applying a 13.5x multiple to the seed division and a 10x multiple to the crop protection unit. JPMorgan noted that investors who take a more bullish view might assign a higher multiple to the Seed business, but cautioned that market participants may be reluctant to settle on a precise multiple until the risks tied to the current crop year are clearer and the planned spin separation is imminent.
Analysts at JPMorgan elaborated on the sensitivity of valuation assumptions, stating: "More optimistic investors may believe that the Seed business should carry a higher multiple than we have placed on the business. We think that each multiple point turn on the Seed operation is worth about $4.50/share." The bank also observed that Monsanto historically traded around 13x EBITDA, with a typical range of 10x to 14x.
At the same time, JPMorgan highlighted factors that could constrain any further rerating. The firm pointed to nearly 99 million acres of corn planted in 2025, which it said could signal a cyclically strong period for the company. Given that backdrop, the bank suggested investors may prefer to await greater clarity on crop-related risks and on the timing and mechanics of Corteva's planned separation of its seed and crop chemical businesses before assigning higher valuations to the shares.
Despite the downgrade, JPMorgan raised its price target to $77 from $75 after increasing its consolidated EBITDA estimate to $4.2 billion from $4.15 billion. The bank cited expectations for stronger operating profits from the seed business as the reason for the EBITDA upgrade, but concluded that the shares look fairly valued at current levels.
Corteva has announced plans to split into two companies in the second half of 2026, most likely in the fourth quarter, a development that JPMorgan said markets may want to see progress on before re-rating the stock.
The bank also trimmed its 2026 earnings-per-share forecast to $3.70 from $3.80, attributing the reduction to higher net interest expenses and larger currency-related losses.
In its commentary, JPMorgan summed up the rationale plainly: "We downgrade Corteva shares to Neutral based on valuation. The company is trading near our previous December 2026 price target of $75."
Separately, a portfolio research product mentioned in relation to the stock evaluates Corteva alongside thousands of other companies each month using more than 100 financial metrics. That product notes it identifies ideas based on fundamentals, momentum and valuation, and cites past winners including Super Micro Computer (+185%) and AppLovin (+157%).
What this means
- The rating change reflects JPMorgan's view that upside from valuation multiple expansion is limited at current prices.
- Near-term company prospects are being weighed against crop-year risks and the upcoming corporate separation.
- Analysts adjusted operating forecasts upward for EBITDA but reduced 2026 EPS due to financing and currency pressures.