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Investing.com - BMO Capital lowered its price target on Dow Inc. (NYSE:DOW) to $20.00 from $22.00 on Tuesday, while maintaining an Underperform rating on the stock. The company’s shares, currently trading at $25.31, have declined over 34% in the past six months and are hovering near their 52-week low of $24.37.
The research firm cited a weak petrochemical market environment and ongoing uncertainty about when conditions might stabilize as key factors behind the decision. According to InvestingPro data, these concerns are reflected in the company’s weak gross profit margins of 7.97% and negative earnings outlook, with 10 analysts recently revising their earnings expectations downward.
BMO noted that Dow management has implemented "increasingly severe actions" to counter macroeconomic challenges, including cutting its dividend by half, putting projects on hold, divesting assets, and taking other measures to preserve cash.
Despite acknowledging these efforts, BMO expressed concern about the "uncertain macro backdrop" and observed that Dow’s earnings are trending below even their conservative forecasts.
The firm also indicated that fiscal 2026 consensus estimates for Dow would need "to come down hard," contributing to their continued Underperform rating on the stock.
In other recent news, Dow Inc. has announced a 50% reduction in its quarterly dividend, setting it at 35 cents per share. This decision comes amid a challenging macroeconomic environment and a prolonged industry downturn. Moody’s Ratings has downgraded Dow’s senior unsecured credit rating to Baa2 from Baa1, citing depressed earnings and governance concerns related to the company’s history of elevated dividend payouts. Meanwhile, Evercore ISI has downgraded Dow’s stock from Outperform to In Line, expressing concerns about the company’s outlook following the dividend cut and reducing its price target to $32.00. RBC Capital has also lowered its price target for Dow to $26.00, maintaining a Sector Perform rating due to a weak earnings outlook. Additionally, BofA Securities has reiterated its Underperform rating on Dow, following the company’s announcement of closing three European facilities. These closures include operations in Böhlen, Germany, Schkopau, Germany, and Barry, UK.
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