JPMorgan upgraded Dow Inc. (DOW) to Overweight from Neutral with a price target of $40, up from $26. The firm believes polyethylene prices can move “sharply” higher in the near term due to higher energy prices. The energy price environment has become inflationary because of the Iran conflict and the restriction of oil and polyethylene shipments from the Mideast through the Strait of Hormuz, the analyst tells investors in a research note. JPMorgan sees Dow’s EBITDA moving higher from dislocations in the chemical market.
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