Midland, Michigan-based Dow Inc. (DOW) is an international chemical company, with a market cap of $36.7 billion, providing various material science solutions for packaging, infrastructure, mobility, and consumer applications globally. It is expected to announce its Q2 earnings before the market opens on Thursday, July 25.
Ahead of the event analysts expect Dow to report a profit of $0.73 per share, down 2.7% from $0.75 per share reported in the year-ago quarter. The company has consistently surpassed Wall Street’s EPS estimates for the past four quarters. Despite its EPS for the last reported quarter declining 3.4% annually to $0.56, it exceeded the consensus estimates by 19.2%.
Looking ahead to fiscal 2024, analysts expect Dow to report an EPS of $2.96, up 32.1% from $2.24 in fiscal 2023. Its fiscal 2025 EPS is expected to grow 47.3% annually to $4.36.
DOW stock is down 3.7% on a YTD basis significantly underperforming the S&P 500 Index’s ($SPX) 16.8% gains and the S&P 500 Materials Sector SPDR’s (XLB) 3.1% returns during the same time frame.
DOW shares declined marginally following the release of its Q1 earnings results on April 25. Dow Inc. faced a mix of headwinds and tailwinds. Headwinds included lower prices in all regions, which resulted in a $34 million decline in operating EBIT year-over-year. Additionally, inflation, interest rates, and geopolitical tensions continued to pose risks. However, the company's diverse portfolio and cost-advantage positions around the world helped offset these challenges.
The packaging and specialty plastics segment has been hit by lower integrated margins and declining prices, while the industrial intermediates and infrastructure segment faces muted consumer durables demand. The performance materials and coatings segment has seen volume growth but may be impacted by seasonal demand fluctuations.
Dow also faced challenges in Europe, where consumer spending and industrial activity remained weak due to ongoing geopolitical tensions. Despite these headwinds, Dow remains optimistic about the second quarter, with expected tailwinds from higher global polyethylene integrated margins, resilient demand in packaging, and continued strength in export markets. It is focused on executing its long-term strategy, investing in growth projects, and maintaining operational and financial discipline.
The consensus opinion on Dow Stock is currently moderately bullish, with a “Moderate Buy” rating overall, up from the “Hold” rating three months ago. Out of the 18 analysts covering the stock, four recommend a “Strong Buy”, and 14 suggest a “Hold” rating.
The average target price for Dow is $60.46, indicating a potential upside of 14.5% from the current price levels.
On the date of publication, Sristi Jayaswal 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.
