Hardman Johnston Global Equity Sold Corteva (CTVA) as It Failed to Observe a Clear Value-Creation Rationale

Hardman Johnston Global Advisors, an investment management company, released its “Hardman Johnston Global Equity Strategy” investor letter for the fourth quarter of 2025. A copy of the letter can be downloaded here. Global equity markets delivered robust results in the quarter, backed by easing inflation trends and strong economic data. The Hardman Johnston Global Equity Strategy returned 2.91%, net of fees, compared to the MSCI AC World Net Index’s 3.29% gain. The Financials and Consumer Staples sectors contributed to the performance, while the Industrials and Consumer Discretionary sectors detracted from relative performance. In addition, please check the Strategy’s top five holdings to know its best picks in 2025.

In its fourth-quarter 2025 investor letter, Hardman Johnston Global Equity Strategy highlighted Corteva, Inc. (NYSE:CTVA). Corteva, Inc. (NYSE:CTVA) is an agriculture company that operates in the Seed and Crop Protection segments. The one-month return of Corteva, Inc. (NYSE:CTVA) was 8.91%, and its shares gained 12.31% of their value over the last 52 weeks. On January 27, 2026, Corteva, Inc. (NYSE:CTVA) stock closed at $73.00 per share, with a market capitalization of $49.33 billion.

Hardman Johnston Global Equity Strategy stated the following regarding Corteva, Inc. (NYSE:CTVA) in its fourth quarter 2025 investor letter:

"During the quarter we liquidated Corteva, Inc. (NYSE:CTVA), T-Mobile US, Inc. and Vertex Pharmaceuticals Inc. We exited our position in Corteva Inc. following management commentary around a potential separation of the Seeds and Crop Protection businesses, as we struggle to see a clear value-creation rationale given Corteva already trades at one of the richer multiples in the ag/chem peer group. While the Seeds business (c. two-thirds of profits) may command a premium multiple, this would likely be offset by a materially lower valuation for the Chemicals business, resulting in limited net value unlock. The separation narrative also raises strategic credibility concerns, as it appears inconsistent with prior management messaging around the complementary nature of Seeds and Chemicals on a single platform, as well as the long-term growth potential of higher-margin areas such as biologicals within Crop Protection. WSJ commentary suggesting a separation could be aimed at insulating the Seeds franchise from potential liabilities in the Chemicals business introduces additional uncertainty. At the same time, end-market fundamentals are becoming less supportive. U.S. corn acreage has risen to peak levels, increasing the risk of a sharp price correction if supply proves difficult to absorb, while soybean markets also face challenges given their reliance on exports and lower demand from China. Depressed farm economics over a prolonged period could pressure farmer spending on inputs. Taken together — elevated valuation, strategic uncertainty, and deteriorating agricultural fundamentals — we viewed the risk-reward as less compelling and chose to exit the position. We will be watching developments closely as the Seeds business is a truly unique franchise with high entry barriers and technological innovation."

Corteva, Inc. (NYSE:CTVA) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 57 hedge fund portfolios held Corteva, Inc. (NYSE:CTVA) at the end of the third quarter, up from 52 in the previous quarter. While we acknowledge the potential of Corteva, Inc. (NYSE:CTVA) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Corteva, Inc. (NYSE:CTVA) and shared the list of best materials stocks to invest in according to hedge funds. Hardman Johnston Global Equity Strategy noted in its Q3 2025 investor letter that Corteva, Inc. (NYSE:CTVA) shares fell following the news of planned split. In addition, please check out our hedge fund investor letters Q4 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.