Street Calls of the Week
Investing.com - Dow Inc. (NYSE:DOW) received a price target cut from Mizuho on Friday, with the firm lowering its target to $25.00 from $26.00 while maintaining a Neutral rating. The stock, currently trading at $24.51, has seen a challenging year with a 42% decline year-to-date. According to InvestingPro data, 8 analysts have recently revised their earnings expectations downward for the upcoming period.
The chemical company reported third-quarter 2025 adjusted EBITDA of $868 million, exceeding both Mizuho’s estimate of $771 million and the Bloomberg consensus of $760 million. This performance also surpassed management’s mid-September guidance of approximately $770 million, partly due to Dow’s decision to shift approximately $125 million of plant maintenance impact from the third quarter of 2025 to the first quarter of 2026. Despite these positive results, InvestingPro analysis shows the company operating with weak gross profit margins of 7.97% and maintaining a significant debt burden.
Despite capacity expansions in U.S. polyethylene and alkoxylate specialties, Dow experienced a 1% global volume decline in the quarter. Regional performance varied significantly, with U.S. and Canada volumes rising 3% year-over-year, while EMEAI declined 8%, Latin America fell 3%, and Asia Pacific grew 6%.
The U.S. polyethylene market showed continued weakness, with no price increases obtained during the quarter as prices remained flat for all three months. Year-over-year global realized polyethylene prices declined approximately 10% or more, similar to the previous quarter’s performance.
Mizuho reduced its EBITDA estimates for 2026 and 2027 to $4.1 billion and $5.1 billion respectively, down from previous forecasts of $4.2 billion and $5.2 billion, citing "ongoing weakness" in the market, while maintaining its 2025 estimate at $3.2 billion. While current market conditions remain challenging, InvestingPro analysis suggests the stock may be slightly undervalued at current levels. Investors should note that Dow maintains a significant 6.4% dividend yield, offering some compensation for patient shareholders. For deeper insights into Dow’s financial health and growth prospects, access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.
In other recent news, Dow Inc reported its third-quarter 2025 earnings, revealing a mixed financial performance. The company achieved an earnings per share (EPS) of -$0.19, which exceeded analysts’ expectations of -$0.31, resulting in a positive surprise of 38.71%. However, Dow’s revenue did not meet forecasts, recording $9.97 billion compared to the anticipated $10.22 billion, marking a shortfall of 2.45%. Despite the revenue miss, the earnings performance was notable for surpassing projections. This mixed result reflects the company’s ongoing financial challenges and achievements. Analysts continue to scrutinize Dow’s financial health, given the discrepancy between earnings and revenue performance. These recent developments are crucial for investors monitoring Dow Inc’s financial trajectory.
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