Dow Inc (DOW) AI Stock Analysis

• Market Cap: $19.85B
• Dividend Yield: 9.93%
• Average Volume (3M): 8.16M
• Price to Earnings (P/E): 18.0
• Beta (1Y): 0.96
• Revenue Growth: -3.72%
• EPS Growth: 91.57%
• Country: US
• Employees: 36,000
• Sector: Basic Materials
• Sector Strength: 60
• Industry: Chemicals
• EPS (TTM): 1.56
• Shares Outstanding: 703,831,900
• 10 Day Avg. Volume: 9,046,104
• 30 Day Avg. Volume: 8,155,465
• PEG Ratio: 0.20
• Price to Book (P/B): N/A
• Price to Sales (P/S): 0.59
• Price to Cash Flow (P/CF): 7.80
• P/FCF Ratio: 8.40
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $40.47
• Price Target Upside: 43.51% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 16

Dow Inc.'s overall stock score of 58 reflects a stable but challenging financial position, with strong operational efficiencies offset by declining revenue and volatile profitability. While technical indicators are bearish, the company's strategic initiatives, including cost reductions and leadership changes, suggest potential for future improvement. The high dividend yield offers a cushion, but the current valuation appears stretched, emphasizing the need for caution.

Positive Factors

Dividend and Earnings Potential

The analyst reiterates an overweight rating for DOW due to its approximately 7% dividend yield and strong earnings upside potential when the cycle turns.

Strategic Asset Management

The company anticipates $3 billion in proceeds mid-year from recent infrastructure monetization.

Negative Factors

Energy and Feedstock Costs

Higher feedstock and energy costs are causing a significant decrease in earnings estimates, with the first quarter EPS estimate lowered drastically.

Macroeconomic Conditions

The CEO mentioned 'persistently weak macroeconomic conditions' and announced new actions to reduce operational expenses.

Maintenance and Operational Headwinds

The company faces maintenance activity headwinds, impacting EBITDA across its three segments, with a $125MM combined impact expected in the first quarter.

Dow Inc Business Overview & Revenue Model

Company Description

Dow Inc. provides various materials science solutions for packaging, infrastructure, mobility, and consumer applications in the United States, Canada, Europe, the Middle East, Africa, India, the Asia Pacific, and Latin America. It operates through Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials & Coatings segments. The Packaging & Specialty Plastics segment provides ethylene, and propylene and aromatics products; and polyethylene, polyolefin elastomers, ethylene vinyl acetate, and ethylene propylene diene monomer rubbers. The Industrial Intermediates & Infrastructure segment offers ethylene oxides, propylene oxides, propylene glycol and polyether polyols, aromatic isocyanates and polyurethane systems, coatings, adhesives, sealants, elastomers, and composites. This segment also provides caustic soda, and ethylene dichloride and vinyl chloride monomers; and cellulose ethers, redispersible latex powders, and acrylic emulsions. The Performance Materials and Coatings segment provides architectural paints and coatings, and industrial coatings that are used in maintenance and protective industries, wood, metal packaging, traffic markings, thermal paper, and leather; performance silicones and specialty materials; and silicone feedstocks and intermediates. It also engages in property and casualty insurance, as well as reinsurance business. Dow Inc. was incorporated in 2018 and is headquartered in Midland, Michigan.

How the Company Makes Money

Dow Inc. generates revenue primarily through the production and sale of chemical and plastic products across its three main segments. The Packaging & Specialty Plastics segment focuses on high-performance materials used in packaging, industrial, and consumer markets. The Industrial Intermediates & Infrastructure segment provides chemicals and materials used in manufacturing processes, serving markets such as energy, transportation, and construction. The Performance Materials & Coatings segment delivers products used in coatings, paints, and advanced materials for various end markets. Dow's earnings are supported by its global manufacturing footprint, strategic partnerships, and innovation in product development to meet customer needs and sustainability goals.

Dow Inc Financial Statement Overview

Summary

Dow Inc. presents a mixed financial picture with strong operational efficiency reflected in EBIT margins and a stable balance sheet marked by a healthy equity ratio. However, challenges such as declining revenue growth and volatile net profit margins highlight areas for improvement. The cash flow statement underscores the need for better management of free cash flow to ensure financial resilience.

Income Statement

The income statement shows a mixed performance with certain strengths and weaknesses. Gross profit margins are robust, particularly in the latest year where all revenue is recognized as gross profit. However, net profit margins are volatile, with a significant drop in net income affecting profitability. Revenue growth has seen a decline in recent years, suggesting a need for strategic initiatives to bolster top-line growth. Despite these challenges, the company maintains a healthy EBIT margin, evidencing operational efficiency.

Balance Sheet

The balance sheet reflects a solid equity base with a stable debt-to-equity ratio, suggesting a balanced capital structure. The equity ratio is healthy, indicating strong asset coverage by equity. However, the return on equity has seen fluctuations, primarily due to inconsistent net income. Overall, the company’s financial position is stable, but improvements in profitability could enhance returns further.

Cash Flow

Cash flow analysis indicates challenges with free cash flow, which has shown significant volatility. The operational cash flow remains positive, suggesting core business activities generate cash, yet the free cash flow has declined recently, indicating higher capital expenditures or other cash outflows. The operating cash flow to net income ratio is healthy, suggesting effective cash generation relative to earnings, but improvements in free cash flow are necessary to enhance financial flexibility.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
42.96B	44.62B	56.90B	54.97B	38.54B
	Gross Profit
4.61B	5.06B	8.56B	10.78B	5.20B
	EBIT
0.00	2.96B	6.87B	8.88B	3.85B
	EBITDA
5.30B	4.00B	9.50B	11.68B	5.54B
	Net Income Common Stockholders
1.20B	589.00M	4.58B	6.31B	1.23B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.19B	2.99B	3.89B	2.99B	5.10B
	Total Assets
57.31B	57.97B	60.60B	62.99B	61.47B
	Total Debt
17.64B	16.45B	16.71B	16.14B	19.04B
	Net Debt
15.46B	13.46B	12.82B	13.15B	13.94B
	Total Liabilities
39.46B	38.86B	39.36B	44.25B	48.47B
	Stockholders Equity
17.85B	18.61B	20.72B	18.16B	12.44B
Cash Flow		Free Cash Flow
-151.00M	2.72B	5.42B	4.68B	4.84B
	Operating Cash Flow
2.91B	5.20B	7.47B	7.01B	6.23B
	Investing Cash Flow
-2.37B	-2.93B	-2.97B	-2.91B	-841.00M
	Financing Cash Flow
-1.17B	-3.12B	-3.36B	-6.07B	-2.76B

Dow Inc Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 28.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DOW, the sentiment is Negative. The current price of 28.2 is below the 20-day moving average (MA) of 35.45, below the 50-day MA of 37.09, and below the 200-day MA of 44.76, indicating a bearish trend. The MACD of -0.81 indicates Positive momentum. The RSI at 36.46 is Neutral, neither overbought nor oversold. The STOCH value of 18.22 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DOW.

Dow Inc Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
WLKP	81 Outperform	$807.32M	12.94	11.98%	8.23%	-4.61%	14.90%
DOW	58 Neutral	$19.85B	18.01	6.14%	9.93%	-3.72%	91.57%
TROX	51 Neutral	$830.75M	―	-2.60%	9.51%	7.82%	84.90%
CE	50 Neutral	$4.58B	6.84	-24.69%	5.20%	-6.03%	-177.29%
HUN	50 Neutral	$2.33B	―	-5.22%	7.45%	-1.23%	-277.52%
Sector *	47 Neutral	$2.36B	-2.99	-21.59%	3.58%	4.21%	-28.30%
BAK	44 Neutral	$1.38B	―	-8638.28%	―	1.97%	-121.00%

Dow Inc Corporate Events

Dow Inc Announces $1 Billion Debt Tender Offer

On February 25, 2025, The Dow Chemical Company announced a cash tender offer to purchase up to $1 billion of certain debt securities from itself and its subsidiaries, Rohm and Haas Company and Union Carbide Corporation. This move is part of Dow’s strategy to manage its debt portfolio, potentially impacting its financial flexibility and market positioning. The tender offer is subject to a financing condition and will expire on March 25, 2025, with the possibility of early settlement for securities tendered by March 10, 2025.