Barclays has revised its price target for Dow Inc. (DOW, Financial), reducing it from $38 to $32. This adjustment comes as the firm reiterates its Equal Weight rating on Dow's shares. According to analyst Michael Leithead, the company's recent management commentary emphasized decisive steps aimed at enhancing cash flow and steering through a sustained market downturn.
Despite these efforts, investor sentiment remains cautious. The prevailing outlook suggests a protracted period of lower-than-expected performance, reflecting ongoing market challenges. This has prompted Barclays to temper its expectations, maintaining a watchful stance in the current environment. The revised price target and continued Equal Weight rating indicate a balanced view, acknowledging both the strategic measures by Dow and the ongoing market uncertainties.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 19 analysts, the average target price for Dow Inc (DOW, Financial) is $41.16 with a high estimate of $65.00 and a low estimate of $28.00. The average target implies an upside of 38.60% from the current price of $29.70. More detailed estimate data can be found on the Dow Inc (DOW) Forecast page.
Based on the consensus recommendation from 23 brokerage firms, Dow Inc's (DOW, Financial) average brokerage recommendation is currently 2.9, indicating "Hold" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Dow Inc (DOW, Financial) in one year is $45.75, suggesting a upside of 54.04% from the current price of $29.7. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Dow Inc (DOW) Summary page.
DOW Key Business Developments
Release Date: January 30, 2025
- Net Sales: $10.4 billion, down 2% year-over-year.
- Local Price: Decreased 3% year-over-year and sequentially.
- Operating EBITDA: $1.2 billion, approximately flat compared to the same period last year.
- Cash Flow from Continuing Operations: $811 million.
- Free Cash Flow: $44 million.
- Returns to Shareholders: $492 million in dividends.
- Total CapEx Spend: $767 million.
- Net Sales for 2024: $43 billion.
- Operating EBIT for 2024: $2.6 billion.
- Volume Growth for 2024: 3%, excluding merchant hydrocarbon sales.
- Packaging and Specialty Plastics Operating EBIT: $447 million, a decrease of $217 million year-over-year.
- Industrial Intermediates and Infrastructure Operating EBIT: Increased by $59 million year-over-year.
- Performance Materials and Coatings Operating EBIT: Increased by $52 million year-over-year.
- First Quarter Earnings Outlook: Approximately $1 billion, down $200 million quarter-over-quarter.
- Cost Reduction Target: $1 billion by 2026.
- CapEx Reduction Target for 2025: $300 million to $500 million.
- Cash Proceeds from Asset Sale: Up to $3 billion from the sale of a minority stake in US Gulf Coast infrastructure assets.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Dow Inc (DOW, Financial) delivered its fifth consecutive quarter of year-over-year volume growth despite weak macroeconomic conditions.
- The company completed the sale of its flexible packaging laminating adhesives business to Arkema for approximately $150 million.
- Dow Inc (DOW) signed a definitive agreement with Macquarie Asset Management for the sale of a minority stake in select US Gulf Coast infrastructure assets, expecting cash proceeds of up to $3 billion.
- The company announced targeted actions to reduce costs by $1 billion and CapEx by $300 million to $500 million to reinforce long-term competitiveness.
- Dow Inc (DOW) was recognized with 12 Edison Awards for Innovation and named one of the Top 25 World's Best Workplaces by Fortune.
Negative Points
- Net sales were down 2% year-over-year, reflecting pricing pressure across the industry.
- Local prices declined 3% year-over-year and sequentially, with declines across all operating segments.
- Operating EBITDA was approximately flat compared to the same period last year.
- The company announced a strategic review of select European assets due to persistently weak global macroeconomic conditions.
- Dow Inc (DOW) is postponing a maintenance turnaround at one of its ethylene crackers in Europe, resulting in idling the asset until market dynamics improve.
