Dow stock price target raised to $27 from $24 at RBC Capital

Investing.com - RBC Capital has raised its price target on Dow Inc. (NYSE:DOW) to $27.00 from $24.00 while maintaining a Sector Perform rating on the stock. The new target aligns closely with InvestingPro’s analysis, which suggests the chemical giant, currently trading at $24.58, is undervalued.

The price target adjustment follows Dow’s third-quarter earnings results, which exceeded both RBC and consensus EBITDA estimates by approximately 20% and 14%, respectively. The company’s fourth-quarter guidance also came in about 5% above consensus expectations. With a substantial market presence and $41.82 billion in revenue, Dow maintains a significant 6.4% dividend yield, according to InvestingPro data.

RBC attributed Dow’s strong performance primarily to cost reductions and higher operating rates in the Packaging & Specialty Plastics segment. Despite these positive factors, the firm expressed caution that these gains might be temporary.

The analyst noted no material demand improvement in Consumer, Building & Construction, or Industrial end markets, which contributed to their maintained Sector Perform rating despite the price target increase.

Based on the third-quarter results and fourth-quarter guidance, RBC has raised its EBITDA estimates for Dow to $725 million for Q4 2025, $3.24 billion for full-year 2025, and $3.70 billion for 2026, up from previous estimates of $678 million, $3.05 billion, and $3.45 billion, respectively.

In other recent news, Dow Inc. reported its third-quarter 2025 earnings, showcasing a mixed financial performance. The company achieved an earnings per share (EPS) of -$0.19, which exceeded the forecast of -$0.31, representing a 38.71% surprise. However, revenue did not meet expectations, totaling $9.97 billion compared to the anticipated $10.22 billion, reflecting a 2.45% shortfall. Despite the revenue miss, Dow’s adjusted EBITDA for the quarter reached $868 million, surpassing both Mizuho’s estimate of $771 million and the Bloomberg consensus of $760 million. This performance was partly influenced by Dow’s strategic decision to defer $125 million in plant maintenance costs to the first quarter of 2026.

Mizuho responded by lowering Dow’s stock price target to $25.00 from $26.00, while maintaining a Neutral rating. Meanwhile, KeyBanc reiterated its Sector Weight rating on Dow, citing the company’s better-than-expected second-half performance due to cost savings and new projects. These developments highlight the dynamic nature of Dow’s recent financial activities and strategic adjustments.

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