Dow Inc. upgraded to Buy from Neutral at Rothschild & Co Redburn

Rothschild & Co Redburn analyst Colin Isaac upgraded Dow Inc. (DOW) to Buy from Neutral with a price target of $40, down from $65. The firm says that in its base case of polyethylene margins recovering while polypropylene “remains at an extended trough,” shares of Dow offer greater upside potential than LyondellBasell (LYB). Dow’s dividend cut provided a reset to its capital allocation and offers flexibility to create value by repaying debt and introducing a buyback program that would be “highly accretive” at the current share price, the analyst tells investors in a research note. Rothschild sees an attractive risk/reward for Dow shares at a “trough” valuation.