We apply a ~14x EV/EBITDA multiple to our 2026 EBITDA estimate of ~$4,228m, equating to a $83 target price. We think CTVA should trade at a premium to its closest competitor due to balance sheet strength, high-quality seed business, and tailwinds from its product pipeline going forward. CTVA’s FY2 EV/EBITDA multiple has ranged between ~6x-14x, with an average of ~11x over the past five years. We believe multiples above historical averages are reflective of strong cost tailwinds + cyclical multiple logic on a recovering Ag macro.

We note the following risks to the shares achieving our target price:

Exposure to Cyclical Ag End Markets: CTVA’s business is largely dependent on global farmer demand and profitability, as both its Seeds and Crop Protection businesses primarily serve growers. Any decrease in crop demand and resulting shift in input reduction would negatively impact CTVA’s business. Agriculture products, especially crop protection, could be subject to backlash or stringent restrictions from environment and sustainability regulations.  

Competitive Markets: CTVA faces significant competition from both large international players, particularly from Europe and Asia-Pacific regions and smaller regional competitors. If competition launches innovative new products or responds more effectively to customer pricing sensitivities, they may threaten CTVA’s market share.

Currency Risk: CTVA is a global company that operates in NAM, EMEA, APAC, and LatAm. It generates around over half of its revenues from foreign countries and therefore is exposed to currencies other than U.S. dollars, namely the Euro, Brazilian real, Canadian dollar, Mexican peso, Chinese renminbi, and Argentine peso. The exchange rates between these currencies and the U.S. dollar have fluctuated in recent years and may continue to do so.

If the impact on the company from any of these factors proves to be greater than we anticipate, the stock will likely have difficulty achieving our target price. Likewise, if any of these factors proves to have less of an effect than we anticipate, the stock could outperform our target.