Dow Inc. Faces Market Struggles Amid Economic Challenges
Recent Stock Performance Shows Significant Underperformance
Based in Midland, Michigan, Dow Inc. (DOW) is a materials science leader with a market capitalization of $30.8 billion. The company offers a diverse range of advanced and sustainable products, including high-value functional polymers and cost-efficient global feedstocks, supported by a vast network of manufacturing facilities worldwide.
Over the past year, shares of Dow have significantly underperformed compared to the broader market. The stock has decreased by 14.5%, while the S&P 500 Index ($SPX) has risen by 30.4%. In 2024 alone, DOW has dropped 19.7%, while the SPX has experienced a 23.1% year-to-date return.
DOW Lags Behind Sector Peers
Focusing more specifically on sector performance, DOW has not kept pace with the Materials Select Sector SPDR Fund’s (XLB) returns, which are at 14.3% over the past year and 6.7% year-to-date.
Various factors have contributed to Dow’s struggles. Declining prices, weak demand in key sectors, and geopolitical tensions in Europe have all impacted the company’s performance, with reduced consumer spending and industrial activity being critical concerns.
Market Moves and Analyst Predictions
On November 4, Dow’s stock fell over 2% after S&P Dow Jones Indices announced that The Sherwin-Williams Company (SHW) would replace Dow in the Dow Jones Industrial Average, effective before trading on November 8.
Looking ahead to the current fiscal year, which ends in December, analysts predict that DOW’s earnings per share (EPS) will decline by 6.3% year-over-year to $2.10. The company has had a mixed earnings surprise history, beating consensus estimates in three of the last four quarters but missing in one.
Currently, Dow stock holds a consensus “Moderate Buy” rating. Among the 19 analysts covering the stock, four recommend a “Strong Buy,” while 15 suggest a “Hold.”
This rating distribution has been stable over recent months.
On November 8, analyst Charles Neivert from Piper Sandler Companies (PIPR) lowered Dow’s price target from $62 to $60 but maintained an “Overweight” rating. The firm expects weaker Q4 earnings due to ongoing market challenges and seasonal demand dips, especially following disappointing Q3 results.
The mean price target for Dow stock is $55.78, indicating a 26.7% potential upside from current levels. The highest target of $62 suggests a notable upside potential of 40.8%.
On the date of publication, Kritika Sarmah 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.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
