Dow Inc, the Basic Materials sector company, was revisited by a Wall Street analyst yesterday. Analyst Vincent Andrews from Morgan Stanley maintained a Hold rating on the stock and has a $27.00 price target.
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Vincent Andrews has given his Hold rating due to a combination of factors impacting Dow Inc. The company is facing higher than anticipated costs in feedstock and energy, which have led to a greater than expected decline in integrated polyethylene (PE) margins. Specifically, ethane and natural gas prices have exceeded expectations, contributing to increased operational costs.
Additionally, while export demand for PE remains robust, domestic markets are experiencing seasonal destocking, which could affect overall demand. In the Industrial Intermediates & Infrastructure and Performance Materials & Coatings segments, there are concerns about potential weaknesses in Europe and the construction sector, despite some positive pricing movements in silicones. These mixed signals and uncertainties, including the Alberta project, have led Andrews to maintain a cautious outlook, justifying a Hold rating.