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Dow Inc (DOW)
NYSE:DOW
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Dow Inc
(NYSE:DOW)
60Neutral
Positive Factors
Cash Management
Actions to preserve cash are expected to provide $6B in cash support to manage the downcycle.
Cost Reduction
Dow is making progress on its $1B in annualized cost reductions, contributing to financial stability.
Dividend Security
Dow's dividend is considered secure for now, with the valuation remaining attractive long term.
Negative Factors
Earnings Headwinds
Intensifying earnings headwinds more than offset a reduced dividend risk.
Project Delays
The Fort Saskatchewan project construction is delayed to align with a cycle recovery, indicating potential future operational challenges.
Tariff Impact
The proposed charges on Chinese shipping vessels could represent a $240-$500m headwind for EBITDA, depending on how much of the tariffs can be offset through adjustments in shipping vessels and tradeflows.
Dow Inc (DOW) vs. S&P 500 (SPY)
Market Cap
$21.13B
Dividend Yield9.33%
Average Volume (3M)10.22M
Price to Earnings (P/E)75.0
Beta (1Y)0.93
Revenue Growth-2.08%
EPS Growth-76.11%
CountryUS
Employees36,000
SectorBasic Materials
Sector Strength60
IndustryChemicals
Share Statistics
EPS (TTM)0.40
Shares Outstanding703,831,900
10 Day Avg. Volume10,418,199
30 Day Avg. Volume10,219,189
Financial Highlights & Ratios
PEG Ratio0.20
Price to Book (P/B)N/A
Price to Sales (P/S)0.59
Price to Cash Flow (P/CF)7.80
P/FCF Ratio8.40
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$34.73Price Target Upside15.69% Upside
Rating ConsensusHold
Number of Analyst Covering16
Dow Inc Business Overview & Revenue Model
Company DescriptionDow 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 MoneyDow 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. exhibits a mixed financial performance with strong gross and EBIT margins but struggles with declining revenue and net profit margins. The balance sheet is stable with moderate leverage, though the equity position could be improved. Cash flow management has improved slightly, but overall growth remains limited.Income Statement
Dow Inc.'s income statement shows a significant fluctuation in revenue and profitability. The TTM (Trailing-Twelve-Months) gross profit margin is strong at 32.28%, but the net profit margin is relatively low at 1.45%. Revenue growth has been negative, declining by 5.91% from 2024 to TTM. Despite a strong EBIT margin of 26.31%, the EBITDA margin is weaker at 9.23%, indicating high depreciation and amortization expenses. Overall, while the company has strong gross margins, the declining revenue and net profit margins suggest challenges in maintaining profitability.65
Positive
Balance Sheet
The balance sheet of Dow Inc. indicates stability with a moderate debt-to-equity ratio of 1.04 and an equity ratio of 30.08% in the TTM period. The company maintains a solid return on equity (ROE) of 3.57%, which is comparatively low, reflecting pressure on profitability. Total assets are substantial, but the equity position has weakened over time. Despite high leverage, the company manages to maintain an acceptable equity ratio, highlighting a balanced approach to financing.70
Positive
Cash Flow
Dow Inc.'s cash flow metrics reflect mixed performance. The TTM free cash flow has improved compared to the previous year, indicating better cash management. However, the free cash flow growth rate from 2023 to TTM is 3.64%, showing only slight improvement. The operating cash flow to net income ratio is strong at 3.97, suggesting efficient cash conversion from earnings. The free cash flow to net income ratio is positive at 0.16, indicating some cash is being retained despite low net income.60
Neutral
| Breakdown | |||||
| TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 42.63B | 42.96B | 44.62B | 56.90B | 54.97B | 38.54B | Gross Profit |
| 13.76B | 4.61B | 5.06B | 8.56B | 10.78B | 5.20B | EBIT |
| 11.22B | 1.91B | 2.96B | 6.87B | 8.88B | 3.85B | EBITDA |
| 3.94B | 5.30B | 4.00B | 9.50B | 11.68B | 5.54B | Net Income Common Stockholders |
| 617.00M | 1.12B | 589.00M | 4.58B | 6.31B | 1.23B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 1.47B | 2.19B | 2.99B | 3.89B | 2.99B | 5.10B | Total Assets |
| 57.50B | 57.31B | 57.97B | 60.60B | 62.99B | 61.47B | Total Debt |
| 17.92B | 17.64B | 16.45B | 16.71B | 16.14B | 19.04B | Net Debt |
| 16.46B | 15.46B | 13.46B | 12.82B | 13.15B | 13.94B | Total Liabilities |
| 40.20B | 39.46B | 38.86B | 39.36B | 44.25B | 48.47B | Stockholders Equity |
| 17.30B | 17.85B | 18.61B | 20.72B | 18.16B | 12.44B |
| Cash Flow | Free Cash Flow | ||||
| 99.00M | -151.00M | 2.72B | 5.42B | 4.68B | 4.84B | Operating Cash Flow |
| 2.45B | 2.91B | 5.20B | 7.47B | 7.01B | 6.23B | Investing Cash Flow |
| -2.10B | -2.37B | -2.93B | -2.97B | -2.91B | -841.00M | Financing Cash Flow |
| -1.73B | -1.17B | -3.12B | -3.36B | -6.07B | -2.76B |
Dow Inc Technical Analysis
Neutral
30.02
Price Trends
34.23
Negative
36.94
Negative
43.19
Negative
Market Momentum
-1.59
Negative
45.68
Neutral
71.76
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DOW, the sentiment is Neutral. The current price of 30.02 is above the 20-day moving average (MA) of 29.77, below the 50-day MA of 34.23, and below the 200-day MA of 43.19, indicating a neutral trend. The MACD of -1.59 indicates Negative momentum. The RSI at 45.68 is Neutral, neither overbought nor oversold. The STOCH value of 71.76 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for DOW.
Dow Inc Risk Analysis
Dow Inc disclosed 15 risk factors in its most recent earnings report. Dow Inc reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Dow Inc Peers Comparison
Overall Rating
UnderperformOutperform
Sector (49)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $833.39M | 13.36 | 11.98% | 7.97% | -4.61% | 14.90% | |
60 Neutral | $21.13B | 75.03 | 1.60% | 9.33% | -2.08% | -76.11% | |
58 Neutral | $887.39M | ― | -2.60% | 8.93% | 7.82% | 84.90% | |
49 Neutral | $1.95B | -1.59 | -21.99% | 3.77% | 0.61% | -27.45% | |
48 Neutral | $4.86B | 6.84 | -24.69% | 4.89% | -6.03% | -177.29% | |
46 Neutral | $2.32B | ― | -5.22% | 7.50% | -1.23% | -277.52% | |
43 Neutral | $1.59B | ― | -8638.28% | ― | 1.97% | -121.00% |
* Basic Materials Sector Average
Performance Comparison
DOW
Dow Inc
30.02
-24.44
-44.88%
CE
Celanese
43.53
-112.32
-72.07%
BAK
Braskem SA
3.95
-4.87
-55.22%
HUN
Huntsman
13.33
-9.96
-42.77%
TROX
TRONOX
5.60
-11.41
-67.08%
WLKP
Westlake Chemical PRN
23.65
3.49
17.31%
Dow Inc Earnings Call Summary
Earnings Call Date: Apr 24, 2025 | % Change Since: 3.52% | Next Earnings Date: Jul 24, 2025
Earnings Call Sentiment Neutral
The earnings call reflects a challenging macroeconomic environment with significant headwinds impacting sales and margins. However, Dow is taking proactive measures to navigate these challenges, including strategic cost reductions, asset sales, and maintaining operational flexibility. Key achievements include consecutive volume growth, strategic transactions, and resolving significant litigation. Despite these efforts, the overall environment remains uncertain, with delayed projects and ongoing demand challenges.Highlights
Sixth Consecutive Quarter of Year-Over-Year Volume Growth
Despite volatile macroeconomic conditions, Dow delivered its sixth consecutive quarter of year-over-year volume growth.
Cost Reduction Initiatives
Dow announced at least $1 billion in annualized cost reductions by 2026, including eliminating 1,500 roles and delaying construction at the Alberta project to align with market recovery.
Strategic Infrastructure Transaction
The strategic transaction with Macquarie Asset Management for a minority stake is expected to generate $2.4 billion in initial cash proceeds, with the potential for an additional $600 million.
Regulatory Approval for Sale of Gulf Coast Assets
Dow received regulatory approval for a strategic transaction to sell a minority stake in US Gulf Coast infrastructure assets, expecting proceeds of approximately $2.4 billion.
NOVA Litigation Resolution
Dow received a final ruling on the NOVA litigation, expecting to receive more than $1 billion later this year.
Expansion of Alkoxylation Capacity
Dow's new alkoxylation expansion in Cedars, Texas, is expected to be fully operational by mid-2025, targeting key growth markets such as energy and pharmaceuticals.
Lowlights
Net Sales Decline
Net sales were $10.4 billion, down 3% year-over-year, reflecting declines in all operating segments due to margin pressures.
EBITDA Decrease
EBITDA was $944 million, down compared to the same period last year, as volume gains were offset by margin compression.
Challenging Macroeconomic Environment
The industry is facing a protracted down cycle, with a third consecutive year of below 3% GDP growth, exacerbated by geopolitical and macroeconomic concerns.
Delays in Alberta Project
Construction at the path to zero project in Fort Saskatchewan, Alberta, has been delayed until market conditions improve.
European Asset Challenges
Dow is expanding its review of European assets in response to ongoing demand challenges and regulatory environment, planning to idle or shut down several assets.
Company Guidance
During Dow's first-quarter earnings call, the company provided guidance amidst prolonged market challenges, with net sales reported at $10.4 billion, a 3% decrease from the previous year, and EBITDA at $944 million, reflecting margin compression despite volume gains. Cash flow from continuing operations was $104 million, while shareholder returns totaled $494 million in dividends. Dow announced targeted cost reductions of at least $1 billion annually by 2026, including the elimination of approximately 1,500 roles and a reduction in capital expenditures by $1 billion for 2025, aiming for an enterprise spend of around $2.5 billion. Additionally, Dow plans to idle or shut down select European assets, including an ethylene cracker and chlor-alkali and vinyl assets in Germany, to enhance cash flow and align with market realities. The company also expects $2.4 billion in proceeds from a strategic transaction with Macquarie Asset Management and over $1 billion from a legal ruling, projecting these actions to provide approximately $6 billion in near-term cash support.Dow Inc Corporate Events
Executive/Board ChangesShareholder MeetingsDividends
Dow Inc Holds Annual Stockholders Meeting and Elections
Positive
Apr 15, 2025
On April 10, 2025, Dow Inc. held its Annual Meeting of Stockholders where all thirteen director nominees were elected with a high approval rate of 93-98%. Stockholders also approved executive compensation and ratified Deloitte & Touche LLP as the independent auditor for 2025. Additionally, the Board declared a quarterly dividend of 70 cents per share and re-elected Richard K. Davis as the independent lead director, highlighting the company’s strong governance and commitment to shareholder value.
Spark’s Take on DOW Stock
According to Spark, TipRanks’ AI Analyst, DOW is a Neutral.
Dow Inc.’s stock score reflects its strong operational efficiency and a stable financial position, but is weighed down by challenges in revenue growth and market sentiment. Valuation appears attractive due to a high dividend yield, although technical indicators suggest bearish momentum. The strategic initiatives from the earnings call could bolster future performance, yet current market conditions and guidance imply caution.
To see Spark’s full report on DOW stock, click here.
Private Placements and FinancingBusiness Operations and Strategy
Dow Inc Announces $1 Billion Debt Tender Offer
Neutral
Feb 25, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.