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DPM - Sharp urea price declines dent 2016 results - Earnings Flash

DPM’s 26.9% 2016 EPS decline (unaudited) was due to a drop in urea prices outweighing a decline in input costs. However, this was in line with our expectation. We are likely to revise down our 2017 forecast and our target price due to a lower earnings contribution from the NH3-NPK project this year. Having said that, a juicy dividend yield, an imminent urea price recovery and a higher contribution from the NH3-NPK project in 2018 still make this stock attractive.