Dow Inc. shares have gained 15.5% so far this year, performing in line with the Zacks Chemicals Diversified industry's 15.4% rise and outpacing the S&P 500's 9.7% increase. The company is benefiting from cost-reduction and productivity improvement efforts, strategic expansion in high-growth markets, and feedstock advantages in the Americas, even as it navigates a challenging macroeconomic environment. Dow recently entered a landmark agreement with Xylem to develop advanced water systems at its Fort Saskatchewan complex and announced approximately $100 million in targeted investments through 2027 to strengthen global specialty silicones manufacturing. The company is targeting $1 billion in cost cuts, with more than $400 million realized in 2025, and has launched a 'Transform to Outperform' initiative aiming for at least $2 billion in near-term operating EBITDA improvement. However, Dow faces headwinds from soft demand in Europe and China, higher feedstock costs in Asia and Europe due to the Middle East conflict, and $145 million in combined turnaround costs and operational issues in the second quarter. The Zacks Consensus Estimate for 2026 earnings has been revised upward over the past 60 days and is currently pegged at $3 per share, suggesting a year-over-year rise of 419.2%. With a forward price-to-sales ratio of 0.44, Dow trades at a discount to the industry and peers LyondellBasell, BASF, and Eastman Chemical. The stock carries a Zacks Rank #3 (Hold), and investors who already own shares may be best served by maintaining their positions.
Dow IncCost cuts and EBITDA improvement target, plus upward earnings revision, support financial outlook.
Eastman Chemical Company
BASF SE
LyondellBasell Industries NV
Xylem Inc