Agri-Market Boost for DuPont

Growth for DuPont (DD)will be driven by non-G7 markets, agricultural chemicals and a focus on key customers and new products. Strong performance in the agricultural products market, emerging markets, pricing actions, favorable currency and productivity is likely to outweigh increasing costs as well as weak auto and housing markets.

The company is focusing on nearly doubling its earnings growth rate. However, slowing demand in U.S. markets is likely to offset growth in agriculture and other markets outside the U.S. This compels us to rate the stock a Hold with a target of $45.00.

The company has a strategy in place to increase volume growth. DuPont has an Ag Platform that is among the industry leaders. It intends to capitalize on rising global demand for its science-based products in agriculture as well as safety and protection. It plans to extend its productivity improvement programs and expects to generate $1.7 billion in productivity gains over the next three years by continuing its efforts to streamline and simplify its supply chains and business support operations.

DuPont expects to achieve at least 30% North American seed corn market share in 2008 and to grow this share in future years. The Pioneer Hi-Bred business is expanding in other regions as well. Pioneer will increase its seed production acreage by 58% in 2008 to meet increased demand for its canola hybrids.

DuPont is optimistic about the Asian economy, especially China. Currently, the company has 38 entities in China including 19 wholly owned enterprises. For the last five years, the company's average annual growth rate is 17% in the country. The company invested more than $700 million in China, which is expected to reach $1.2 billion in 2010.

Bullish Outlook for NOC

Northrop Grumman Corporation (NOC)offers a strong program portfolio positioned to take advantage of high growth areas in the defense budget, an improving balance sheet and an ongoing share repurchase program. Favorable projected revenue, the acquisition of Scaled Composites, diversified revenue and earnings streams with strong growth and discounted relative valuation metrics collectively support our bullish outlook for NOC.

Accordingly, we maintain our Buy recommendation on NOC common stock with a six-month target price of $76.00. Price appreciation to our near-term valuation target coupled with the recently increased $0.40 per share quarterly dividend, which we deem secure and sustainable based upon low projected payouts represents 38.9% total return potential.