DuPont Upgraded On Positive Reward-versus-risk Profile

DuPont Co.'s stock 1.3% in premarket trade Friday, after the chemical company was upgraded to overweight from neutral at J.P. Morgan, which cited a positive reward-versus-risk profile in owning the shares after five years of underperforming the market. Analyst Jeffrey Zekauskas raised his rating to overweight, after being at neutral since late January. He bumped up his stock price target to $60, which is 13% above Thursday's closing price of $53.03, from $58. The stock has tumbled 25% year to date through Thursday, while the Dow Jones Industrial Average has slipped 2.3%. Over the past five years, DuPont shares have gained 38% while the Dow has advanced 69%. Zekauskas said the fact that a referendum on management performance, sought by activist investor Nelson Peltz's hedge fund Trian Fund Management, was settled by a vote of confidence in management is a positive for the stock. "Management is now in a position to demonstrate that the confidence of its shareholder base was well-placed," Zekauskas wrote in a note to clients. So despite lingering negative conditions in the chemicals industry, "we think there is a positive risk/reward in owning the shares now, he said.