Dow Inc Faces Sell Rating Amid Weak Market Dynamics and Projected EBITDA Decline

BMO Capital analyst John McNulty downgraded the rating on Dow Inc (DOW – Research Report) to a Sell today, setting a price target of $22.00.

John McNulty has given his Sell rating due to a combination of factors impacting Dow Inc’s financial outlook. The company is experiencing significant weaknesses across its end-markets, leading to reduced pricing power and lower operational rates, which are expected to severely challenge its EBITDA in the second quarter and the second half of the year. Looking ahead to 2026, unless there is a substantial change in the macroeconomic environment or significant supply closures, Dow’s EBITDA is projected to fall approximately $1 billion below consensus estimates. Additionally, the persistent low earnings levels heighten the risk of a potential dividend cut.
Further compounding these issues, Dow faces challenges in commodity fundamentals, such as tariffs and weak supply-demand dynamics, which have exerted additional downward pressure on its earnings. In the Packaging & Specialty Plastics segment, tariff-related uncertainties have led to reduced operating rates and pricing losses. The Industrial Intermediates & Infrastructure segment is under pressure from weak global construction demand and high mortgage rates in the U.S., while the Performance Materials & Coatings segment is experiencing softness in siloxanes and coatings markets. These structural issues make it difficult for Dow to achieve a quick recovery in earnings, leading to a lowered EBITDA forecast for 2026.