Corteva, Inc.CTVANYSE

Overview Intelligence Charts News Fundamentals

DCF Valuation

DCF Valuation Summary

Sell

Fair Value: $65.86 per share(market-calibrated)

-16.6%

Upside to Fair Value

Current

$78.93

Pure Model

$64.92

Fair Value

$65.86

Bull Case

$74.93

Bear Case

$55.98

Market Reality Check

Model Terminal Growth

2.25%

Market-Implied Growth

3.93%

Calibrated Growth

2.50%

Fair value uses 85% model / 15% market-implied terminal growth. Pure model: $64.92.

What's Driving This Ratingfor CTVA

✓

CapEx already efficient

CapEx at 3.40% of revenue is already at or below sector maintenance level. No normalization needed — cash conversion is already strong.

↑

Margin expansion modeled

Current EBIT margin is 10.23% — below the sector mature average of 15.05%. Model expands margins as the business scales and operating leverage kicks in. Year 10 EBIT reaches $2.7B (12.27% margin).

→

Moderate revenue growth

Analyst consensus projects 3.98% revenue growth, fading to 2.25% by Year 10. Revenue reaches $22.4B (vs $17.4B today).

🎯

Market pricing in higher long-term growth

To justify $78.93, the market implies 3.93% perpetual growth — 168bps above the model's 2.25%. This suggests the market sees additional growth catalysts (AI, new products, market expansion) not captured in analyst estimates.

✓

Strong cash flow conversion

Year 10 FCF/EBITDA conversion of 62.53% indicates efficient cash generation. FCF reaches $2.7B by Year 10 (12.06% FCF margin).

Weighted Average Cost of Capital (WACC)

Cost of Equity (CAPM)

Risk-Free Rate (Rf)4.50%

Beta (β)0.74

Market Risk Premium4.50%

*Using current implied premium (4.5% per Damodaran 2026), not historical (6.5%)

Cost of Equity (Re)7.82%

Cost of Debt

Pre-tax Cost of Debt5.85%

Tax Rate28.67%

After-tax Cost of Debt4.17%

Equity Weight (E/V)95.37%

Debt Weight (D/V)4.63%

WACC Calculation

WACC = (E/V × Re) + (D/V × Rd × (1-Tc))

WACC = (95.37% × 7.82%) + (4.63% × 4.17%)

= 7.65%

10-Year Free Cash Flow Projections(showing years 1, 3, 5, 7, 10)

Year	Year 1	Year 3	Year 5	Year 7	Year 10
Revenue	$18.1B	$19.2B	$20.0B	$20.9B	$22.4B
EBIT	$1.9B	$2.0B	$2.2B	$2.4B	$2.7B
Tax	$531M	$563M	$618M	$694M	$787M
NOPAT	$1.3B	$1.4B	$1.5B	$1.7B	$2.0B
+ Depreciation	$1.3B	$1.3B	$1.4B	$1.5B	$1.6B
- Capex	$616M	$654M	$681M	$712M	$761M
- Δ NWC	$96M	$73M	$61M	$64M	$69M
Free Cash Flow	$1.9B	$2.0B	$2.2B	$2.4B	$2.7B
Discount Factor	0.929	0.802	0.692	0.597	0.479
Present Value	$1.7B	$1.6B	$1.5B	$1.4B	$1.3B

FCF Formula: Free Cash Flow = NOPAT + Depreciation - Capex - Change in Net Working Capital

Terminal Value Calculation

Perpetuity Growth Method

Year 10 FCF$2.7B

Terminal Growth Rate2.25%

WACC7.65%

TV = FCF₁₀ × (1+g) / (WACC-g)

Terminal Value$51.1B

PV of Terminal Value$24.4B

Exit Multiple Method

Year 10 EBITDA$4.3B

Exit Multiple (EV/EBITDA)14.0x

TV = EBITDA₁₀ × Exit Multiple

Terminal Value$60.4B

PV of Terminal Value$28.9B

Valuation Summary

Perpetuity Growth Method

PV of Projected FCFs$15.1B

PV of Terminal Value$24.4B

Enterprise Value$39.5B

(-) Net Debt-$1.9B

Equity Value$41.5B

Shares Outstanding673M

Price per Share$61.62

Exit Multiple Method

PV of Projected FCFs$15.1B

PV of Terminal Value$28.9B

Enterprise Value$44.0B

(-) Net Debt-$1.9B

Equity Value$45.9B

Shares Outstanding673M

Price per Share$68.22

Pure Model Fair Value

$64.92

Average of perpetuity growth and exit multiple methods (before market calibration)

Sensitivity AnalysisPrice per Share

WACC ↓ / Growth →	1.25%	1.75%	2.25%	2.75%	3.25%
5.65%	$80.16	$83.72	$88.33	$94.53	$103.32
6.65%	$69.73	$71.85	$74.46	$77.73	$81.97
7.65%	$61.93	$63.30	$64.92	$66.87	$69.27
8.65%	$55.77	$56.70	$57.78	$59.04	$60.53
9.65%	$50.74	$51.39	$52.14	$53.00	$53.99

How to read: This table shows how the valuation changes with different WACC (discount rate) and terminal growth rate assumptions. Green = undervalued, Red = overvalued.

Scenario Analysis

Bear Case

$55.98

-29.1% vs current

• -25% vs analyst consensus
• Terminal growth: 2.0%
• Beta: 0.92

Base Case

$64.92

-17.8% vs current

• Analyst consensus
• Terminal growth: 2.3%
• Beta: 0.74

Bull Case

$74.93

-5.1% vs current

• +25% vs analyst consensus
• Terminal growth: 2.8%
• Beta: 0.63

Key Assumptions & Drivers• Basic Materials Sector

Growth Assumptions (Select Years)

Year 1 Revenue Growth3.98%

Year 3 Revenue Growth2.79%

Year 5 Revenue Growth2.25%

Year 7 Revenue Growth2.25%

Year 10 Revenue Growth2.25%

Terminal Growth Rate2.25%

Margin & Efficiency

Current EBIT Margin10.23%

Terminal EBIT Margin15.05%

Tax Rate28.67%

Historical Capex / Rev3.40%

NWC / Revenue13.93%

Key Drivers: Revenue growth, operating margin expansion, capex efficiency, and working capital management are the primary drivers of cash flow generation. Terminal value assumptions significantly impact final valuation.

Institutional-Grade Methodology

Actual Company Data: Revenue, EBIT, Capex, NWC, Tax Rate, Interest Expense, Beta

Market Assumptions: Risk-free: 4.5% (10Y), MRP: 4.5% (Damodaran 2026), Exit: 14x EV/EBITDA (Basic Materials sector)

This DCF model is for informational purposes only. Projections are based on assumptions that may not materialize. Past performance does not guarantee future results. Consult a financial advisor before making investment decisions.

Explore More

S&P 500 Screener

Filter and sort all 500 stocks

Market Movers

Today's biggest gainers and losers

Market Heatmap

Visual sector performance