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Investing.com - Mizuho (NYSE:MFG) maintained its Neutral rating on Dow Inc. (NYSE:DOW) stock but lowered its price target to $31.00 from $32.00 on Monday, citing industry-wide challenges in the chemicals sector. The stock, currently trading at $27, offers a notable 10.37% dividend yield, though InvestingPro data indicates it’s trading at a high P/E ratio of 67.6x.
The price target reduction reflects Mizuho’s concerns about lower plant operating rates across the industry and ongoing weakness in polyethylene pricing, which are expected to impact Dow’s financial performance.
Mizuho significantly reduced its second-quarter EBITDA estimate for Dow to $797 million from the previous forecast of $948 million, representing a 16% decrease in expected earnings.
The firm also cut its full-year EBITDA projection to $3.8 billion from $4.2 billion, a 9.5% reduction that signals continued headwinds for the chemical manufacturer throughout 2025.
The revised outlook for Dow comes amid broader challenges in the chemicals industry, where production capacity utilization has declined and pricing power remains constrained, particularly in the key polyethylene market.
In other recent news, Dow Inc. reported its first-quarter 2025 earnings, showing a slight miss on earnings per share (EPS) with $0.02 compared to the expected $0.03, while revenue slightly exceeded expectations at $10.4 billion against a forecast of $10.28 billion. In related developments, a Canadian court has ordered NOVA Chemicals to pay Dow CAD$1.62 billion (approximately USD$1.2 billion) in damages related to a jointly owned ethylene asset, with payment anticipated in the fourth quarter of 2025. Additionally, Dow has agreed to sell its 50% stake in DowAksa Advanced Composites Holdings BV to Aksa (IS:AKSA) Akrilik Kimya Sanayii A.Ş. for $125 million, aligning with its strategy to focus on core businesses. On the analyst front, BMO Capital downgraded Dow from Market Perform to Underperform, citing weak market conditions affecting the company’s end-markets and potential future EBITDA. Barclays (LON:BARC) also adjusted its price target for Dow Inc. from $38.00 to $32.00, maintaining an Equalweight rating amid strategic liquidity measures by the company. These developments reflect Dow’s ongoing efforts to navigate challenging economic conditions while focusing on strategic growth and financial flexibility.
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