Fundamentals · BA
DuPont (ROE Decomposition) for BA
AI-generated plain-English read of dupont (roe decomposition) for BA. Updated daily.
Leverage-driven ROE, deteriorating
highROE is falling (-0.1%) and leverage of 27.52× is amplifying every problem. When a highly-levered company's ROE deteriorates, the real pain is usually in margins or debt service — check both.
What will probably happen
- ROE has been falling — without a reversal in the weakest leg, the next period will likely show further pressure.
- Critical leverage flag: a 27.52× equity multiplier means any margin contraction of even a few percentage points will wipe out ROE disproportionately. Watch for earnings revisions or debt-service pressure.
What to do
- If you HOLD this stock
- The 27.52× leverage is a structural risk for holders. Any macro headwind (rate rise, demand drop) that compresses margins gets amplified into ROE. Ensure your thesis accounts for this — the company has less margin of safety than its headline ROE suggests.
- If you are EVALUATING this stock
- Don't let the headline ROE (-0.1%) mislead you — it's primarily a function of 27.52× leverage. A cleaner way to compare this company is on ROIC or on ROA, which strip out the capital structure effect.
- If you trade OPTIONS
- Leverage amplification + deteriorating ROE is structurally bearish. Elevated leverage means the stock can move sharply on bad news — protective puts or put spreads are justified on a fundamental basis, not just sentiment.
36 periods with all three DuPont legs populated — trend reads are reliable.
Technical details
Technical analysis
- ROE
- -0.1% — deteriorating
- Sector context
- not provided
- Periods analysed
- 36
- Primary ROE driver
- Leverage Driven
- Profitability (net margin)
- -0.0% — improving, mixed
- Asset efficiency (turnover)
- 0.13× — stable, healthy
- Leverage (equity multiplier)
- 27.52× — improving, worrying [CRITICAL]
Key levels
| Level | Value |
|---|---|
| latest em | 27.524 |
| latest roe | -0.001 |
| latest margin | -0 |
| latest turnover | 0.135 |
| em high threshold | 4 |
| em critical threshold | 5 |
Caveats
- Equity multiplier of 27.5× is critically high. A small profitability decline gets amplified proportionally into ROE — this company is running with very thin margin of safety.
- ROE is negative — the decomposition is directionally informative but interpret absolute magnitudes with care.