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Pro Analysis

Buy chemical giant DowDuPont because it will generate a ton of cash: JPMorgan

DuPont research scientists at work in a biobutanol molecular biology lab
Source: Dupont
DuPont research scientists at work in a biobutanol molecular biology lab

Investors should buy DowDuPont shares because its cash earnings will surge in the coming years after the company completes its restructuring, according to JPMorgan, which initiated coverage on the chemical giant with an overweight rating.

After Dow Chemical and DuPont completed their mega-merger in August the new "DowDuPont now takes its place as the largest chemical company in the world … Free cash flow generation should step up sharply in 2019 and 2020 with the restructuring effort complete," analyst Jeffrey Zekauskas wrote in a note to clients Friday.