Dow Inc. Sees Steep Stock Decline Despite Strong Market Potential
Valued at a market cap of $27.2 billion, Dow Inc. (DOW) is a leading global materials science company specializing in innovative and sustainable chemical, plastic, and industrial solutions. Headquartered in Midland, Michigan, Dow develops advanced materials and performance products that serve a wide range of industries, including packaging, infrastructure, automotive, and consumer goods.
Subpar Stock Trends Compared to Broader Indexes
Shares of Dow have underperformed the broader market considerably over the past year. DOW stock has declined 28.5% over this time frame, while the broader S&P 500 Index ($SPX) is up 20.7%. In 2025, the stock is down 3.7%, compared to SPX’s 3.2% return on a year-to-date (YTD) basis.
Struggles Against Industry Comparisons
Narrowing the focus, DOW has also lagged behind the Materials Select Sector SPDR Fund’s (XLB) 7.4% returns over the past year and 6.1% gains on a YTD basis.
Recent Earnings Report Leads to Stock Drop
On January 30, Dow reported its Q4 earnings, causing a 6.1% drop in its stock price. The company posted net sales of $10.4 billion, down 2% year over year, despite a 1% volume increase across most regions. Operating EBIT declined by $105 million to $454 million, primarily due to lower prices, partially offset by higher operating rates and cost reductions. Dow reported a GAAP net loss of $35 million, or $0.08 per share, reflecting restructuring and efficiency-related costs.
Mixed Earnings Outlook Offers Some Hope
For the current fiscal year, ending in December, analysts expect DOW’s EPS to grow 32.2% year over year to $2.26. The company’s earnings surprise history is mixed, having beaten consensus estimates in two of the last four quarters while missing in two others.
Consensus Rating Indicates Hesitancy Among Analysts
Dow stock has a consensus “Moderate Buy” rating overall. Out of 19 analysts covering the stock, four advise a “Strong Buy,” and 15 suggest a “Hold.”
Price Target Adjustments Reflect Market Concerns
On January 31, RBC Capital lowered DOW’s price target to $38 from $41, while maintaining a “Sector Perform” rating. This decision was driven by near-term volume and margin weakness, along with $200 million in expected Q1 headwinds, despite a slight Q4 EBITDA beat.
The mean price target of $46.31 suggests a 19.9% premium to the current levels. The Street-high target of $57 represents an impressive upside potential of 47.6%.
On the date of publication, Rashmi Kumari did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
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