Agricultural giant Corteva (CTVA.US) faced Wall Street skepticism over rumors of a potential split, causing its stock price to plummet by over 5%.

An analyst from KeyBanc, a top investment firm on Wall Street, stated that the potential move by global agricultural platform leader Corteva (CTVA.US) to completely spin off its seed and pesticide business seems very negative, or "very confusing for investors." Media reports last Friday cited sources revealing that Corteva is evaluating a potential split of its seed and pesticide business into two independent companies, and the company may soon announce its plans. As of Monday's closing of the U.S. stock market, Corteva's stock price fell 5.68% to $70.07, dropping nearly 7% at one point during trading, highlighting that the vast majority of investors in the market are very pessimistic about the prospects of the company's business split. Corteva is a global leader in the "pure agriculture" sector, with its main businesses including seed (Seed) and crop protection focused on crop protection (Crop Protection); in 2024, the company's net sales are approximately $16.9 billion, with seeds accounting for about 56.5% and crop protection accounting for about 43.5%. Corteva's agricultural business covers over 110 countries, providing farmers with commercial seeds, trait/resistance technologies, herbicides/insecticides/fungicides, and biological solutions. Corteva's seed brands and business channels include Pioneer, Brevant, etc., focusing on providing excellent germplasm + trait combinations for crops such as corn, soybeans, canola, and wheat. In addition, in recent years, the company has increasingly focused on its crop protection product line, mainly including Zorvec active (oxathiapiprolin): a first-in-class fungicide with a novel mode of action for oomycete diseases such as late blight, widely used in high-value crops such as potatoes, grapes, and vegetables; Rinskor active (flupyrsulfuron): the main control agent for broadleaf and grass weeds in rice fields, characterized by low dosage and broad spectrum; Spinosyns (spinosad, spinetoram): a highly efficient insecticide technology derived from natural streptomycetes, used in fruits/vegetables/specialty crops. "Our initial view is that if this news is confirmed, it could be at most negative or very confusing for Corteva (CTVA) stock price performance, mainly because: 1) there is almost no upside valuation under the sum-of-the-parts (SOTP) basis; 2) concerns about potential liabilities from management are worrisome; and 3) the lack of synergy between sales and costs." wrote KeyBanc senior stock analyst Aleksey Yefremov in a report on Sunday. Analyst Aleksey estimates that the additional cost of creating two independent publicly traded companies would be approximately $50 million to around $60 million. "Although this is still speculation, we do not see any financial or strategic positive significance," wrote Bank of America Corp analyst Matthew DeYoe in a report. "CTVA's valuation based on a consistent expected EBITDA multiple of 13.4x in the current trading price range does not demonstrate potential value creation through an SOTP analysis immediately. Additionally, we believe that if the split news is true, leaving behind the support of the CTVA entity, any split could potentially create two entities weaker than they are now."