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DPM [OUTPERFORM +13.6%] - The worst is over; optimistic for 2019 and beyond - Update

We lower our target price but upgrade to an OUTPERFORM rating with a total return of 13.6% as we think the stock has fallen to undervalued territory. We forecast 2018 EPS to drop 14.7% YoY due to margin compression of the urea segment on rising input cost and a small loss from the NPK plant owning to a low utilization rate. We expect the NPK plant to begin commercial operations in late Q2 2018 and incur small losses due to low utilization before contributing ~10%-20% to earnings from 2020.