Barclays cuts Dow Inc. stock price target to $32 from $38

On Thursday, Barclays (LON:BARC) analyst Michael Leithead revised the price target on Dow Inc. (NYSE: NYSE:DOW) shares, reducing it to $32.00 from the previous $38.00. With the stock currently trading at $29.82, analyst targets range from $28 to $65, reflecting mixed sentiment on Wall Street. Despite the price target cut, Leithead retained an Equalweight rating on the company’s stock. The adjustment followed Dow Inc.’s latest quarterly report, which highlighted the company’s strategic measures to generate liquidity and manage the extended period of economic challenges. According to InvestingPro data, 12 analysts have recently revised their earnings expectations downward for the upcoming period.

Dow Inc.’s management has taken decisive steps to ensure financial flexibility, including delaying capital expenditures and increasing asset sales, coupled with cash inflows from litigation settlements. These actions have provided a buffer against concerns regarding the company’s ability to sustain its dividend payments. As a result of these developments, Dow Inc.’s shares experienced an approximate 4% increase, outperforming the S&P 500’s 2% rise as of 1 p.m. ET.

Leithead’s commentary pointed out the cautious stance of investors towards Dow Inc.’s structural earnings potential and the long-term implications of the current strategies for cash generation. The company’s weak gross profit margin of 10.9% and projected earnings decline to $1.33 per share for FY2025 underscore these concerns. The analyst’s statement underlined the balance between the immediate benefits of these financial maneuvers and the potential costs they may incur over time.

Despite the rally in Dow Inc.’s stock following the company’s announcement of its financial tactics, the lowered price target reflects ongoing investor reservations about the chemical giant’s earnings stability amidst a challenging economic landscape. Leithead’s analysis indicates that while the near-term outlook for Dow Inc. may be bolstered by its cash preservation efforts, the broader perspective of its earnings capability remains under scrutiny.

In summary, Barclays has adjusted its outlook on Dow Inc., signaling a conservative expectation for the stock’s future performance, while acknowledging the company’s proactive approach to managing its current financial challenges.

In other recent news, Dow Inc. reported its first-quarter 2025 earnings, slightly missing the earnings per share (EPS) forecast. The company posted an EPS of $0.02, falling short of the expected $0.03, while revenue slightly exceeded expectations at $10.4 billion compared to the anticipated $10.28 billion. Despite the revenue beat, Dow is actively pursuing cost-cutting measures, including reducing capital expenditures and workforce, aiming for $1 billion in cost reductions by 2026. The company is navigating global demand challenges, particularly in Europe and China, which are affecting key sectors such as automotive and housing. Dow is also involved in strategic infrastructure transactions, expecting to receive $2.4 billion in cash proceeds by May 1. Meanwhile, the firm has received regulatory approval for a strategic transaction with Macquarie Asset Management involving the sale of a minority stake in select U.S. Gulf Coast infrastructure assets. On the analyst front, there are no recent upgrades or downgrades mentioned, but the company continues to face geopolitical and macroeconomic uncertainties impacting its market positioning.

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