BofA Cuts Dow Rating to Underperform, Shares Drop 4%

• BMO Capital downgraded DOW to "Underperform" with a stock price of $28.73.
• Despite the downgrade, DOW's stock price slightly increased to $28.77, showing resilience.
• The broader US stock indices, including NASDAQ, S&P 500, and Dow Jones, are expected to experience some softness, potentially impacting DOW's performance.

Dow Inc. (NYSE:DOW) is a leading materials science company that provides a wide range of products and solutions in sectors such as packaging, infrastructure, and consumer care. As Dow prepares to release its quarterly earnings on April 24, 2025, Wall Street anticipates an earnings per share (EPS) of -$0.02 and revenue of approximately $10.26 billion. This release is closely watched by investors and analysts alike.

The expected weak earnings are attributed to increased maintenance expenses and rising feedstock costs. These factors have led to a significant year-over-year decline of 103.6% in EPS, as highlighted by Wall Street analysts. Despite these challenges, Dow has implemented cost-cutting measures, offering some optimism for investors.

The company's revenue is projected to be $10.27 billion, a 4.6% decrease from the same quarter last year. A major concern for investors is the sustainability of Dow's high dividend yield, especially if a global recession prolongs the current downturn in the business cycle.

Despite these economic challenges, Dow's price-to-book ratio of 1.10 suggests it remains a viable long-term investment. The company's price-to-earnings (P/E) ratio is approximately 18.29, indicating the price investors are willing to pay for each dollar of earnings. Dow's financial metrics provide insight into its valuation and performance. The price-to-sales ratio of 0.48 suggests investors are paying 48 cents for every dollar of sales.

The enterprise value to sales ratio is 0.83, reflecting the company's valuation compared to its sales. Additionally, the enterprise value to operating cash flow ratio is 12.31, showing how the company's valuation compares to its cash flow from operations. The company's debt-to-equity ratio of 0.99 indicates a balanced use of debt relative to its equity, while a current ratio of 1.61 suggests a good level of liquidity to cover short-term liabilities.

With an earnings yield of 5.47%, Dow offers a return on investment based on its earnings, making it an attractive option for long-term investors despite the current challenges.

Dow Inc. (NYSE:DOW) is a leading materials science company that provides a wide range of products and solutions in sectors such as packaging, infrastructure, and consumer care. As Dow prepares to release its quarterly earnings on April 24, 2025, Wall Street anticipates an earnings per share (EPS) of -$0.02 and revenue of approximately $10.26 billion. This release is closely watched by investors and analysts alike.

The expected weak earnings are attributed to increased maintenance expenses and rising feedstock costs. These factors have led to a significant year-over-year decline of 103.6% in EPS, as highlighted by Wall Street analysts. Despite these challenges, Dow has implemented cost-cutting measures, offering some optimism for investors.

The company's revenue is projected to be $10.27 billion, a 4.6% decrease from the same quarter last year. A major concern for investors is the sustainability of Dow's high dividend yield, especially if a global recession prolongs the current downturn in the business cycle.

Despite these economic challenges, Dow's price-to-book ratio of 1.10 suggests it remains a viable long-term investment. The company's price-to-earnings (P/E) ratio is approximately 18.29, indicating the price investors are willing to pay for each dollar of earnings. Dow's financial metrics provide insight into its valuation and performance. The price-to-sales ratio of 0.48 suggests investors are paying 48 cents for every dollar of sales.

The enterprise value to sales ratio is 0.83, reflecting the company's valuation compared to its sales. Additionally, the enterprise value to operating cash flow ratio is 12.31, showing how the company's valuation compares to its cash flow from operations. The company's debt-to-equity ratio of 0.99 indicates a balanced use of debt relative to its equity, while a current ratio of 1.61 suggests a good level of liquidity to cover short-term liabilities.

With an earnings yield of 5.47%, Dow offers a return on investment based on its earnings, making it an attractive option for long-term investors despite the current challenges.

Dow (NYSE:DOW) saw its share drop by 4% on Tuesday after BofA Securities downgraded it from Buy to Underperform and sharply lowered its price target to $28 from $44, citing mounting macroeconomic challenges, growing trade restrictions, and rising U.S. feedstock costs.

The firm had previously been bullish on Dow’s potential to benefit from a petrochemical and broader economic recovery. However, that recovery now appears delayed, and BofA has trimmed its 2025 and 2026 EBITDA forecasts by 17% and 23%, respectively, to $4.8 billion and $5.4 billion.

Adding to the concern is Dow’s $2 billion annual dividend, which now looks vulnerable as free cash flow shortfalls are projected to balloon to $2.6 billion over the next two years—more than double earlier estimates. Net leverage is also expected to remain near 3x through 2027.

Despite the stock already falling 19% since the April 2nd tariff news, BofA believes further downside remains given the deteriorating earnings outlook, valuation concerns, and heightened balance sheet pressure.

• BMO Capital downgraded DOW (NYSE:DOW) from "Market Perform" to "Perform" with a current stock price of $40.09.
• The Dow Jones Industrial Average, including DOW, is expected to underperform compared to the S&P 500 and Nasdaq Composite despite its appeal for stability and dividends.
• DOW's market capitalization stands at approximately $27.72 billion, with a recent price decrease reflecting market volatility.

On December 25, 2024, BMO Capital downgraded DOW (NYSE:DOW) from "Market Perform" to "Perform," with the stock priced at $40.09. This change was reported by Benzinga in an article titled "Top 7 Blue-Chip Stocks With The Best Return Potential Going Into 2025." DOW is a part of the Dow Jones Industrial Average, a collection of blue-chip stocks known for their stability and dividends.

As 2024 ends, the Dow Jones Industrial Average is expected to underperform compared to the S&P 500 and Nasdaq Composite. Over the past five years, the Dow has returned 68.2%, which is lower than the S&P 500's 102.8% and Nasdaq's 132.7%. Despite this, Dow stocks remain attractive for their stability and dividends, appealing to investors seeking quality blue-chip companies.

DOW's current price on the NYSE is $39.60, reflecting a decrease of approximately 1.09% from the previous day. The stock has seen a decline of $0.44 today, with a trading range between $39.23 and $39.92. Over the past year, DOW's price has fluctuated between a high of $60.69 and a low of $38.85, indicating some volatility.

The company's market capitalization is approximately $27.72 billion, with a trading volume of 5,158,785 shares. Despite the recent downgrade and price fluctuations, DOW remains a part of the Dow Jones Industrial Average, which includes industry leaders like McDonald's, The Home Depot, and Chevron. These companies are valued for their stability and potential to generate passive income through dividends.

For investors interested in passive income, dividend stocks like McDonald's, The Home Depot, and Chevron are worth considering. An investment of $3,500 in each of these Dow stocks could yield over $325 in passive income in 2025. This highlights the appeal of Dow stocks for those seeking steady returns in uncertain markets.

• BMO Capital downgraded DOW (NYSE:DOW) from "Market Perform" to "Perform" with a current stock price of $40.09.
• The Dow Jones Industrial Average, including DOW, is expected to underperform compared to the S&P 500 and Nasdaq Composite despite its appeal for stability and dividends.
• DOW's market capitalization stands at approximately $27.72 billion, with a recent price decrease reflecting market volatility.

On December 25, 2024, BMO Capital downgraded DOW (NYSE:DOW) from "Market Perform" to "Perform," with the stock priced at $40.09. This change was reported by Benzinga in an article titled "Top 7 Blue-Chip Stocks With The Best Return Potential Going Into 2025." DOW is a part of the Dow Jones Industrial Average, a collection of blue-chip stocks known for their stability and dividends.

As 2024 ends, the Dow Jones Industrial Average is expected to underperform compared to the S&P 500 and Nasdaq Composite. Over the past five years, the Dow has returned 68.2%, which is lower than the S&P 500's 102.8% and Nasdaq's 132.7%. Despite this, Dow stocks remain attractive for their stability and dividends, appealing to investors seeking quality blue-chip companies.

DOW's current price on the NYSE is $39.60, reflecting a decrease of approximately 1.09% from the previous day. The stock has seen a decline of $0.44 today, with a trading range between $39.23 and $39.92. Over the past year, DOW's price has fluctuated between a high of $60.69 and a low of $38.85, indicating some volatility.

The company's market capitalization is approximately $27.72 billion, with a trading volume of 5,158,785 shares. Despite the recent downgrade and price fluctuations, DOW remains a part of the Dow Jones Industrial Average, which includes industry leaders like McDonald's, The Home Depot, and Chevron. These companies are valued for their stability and potential to generate passive income through dividends.

For investors interested in passive income, dividend stocks like McDonald's, The Home Depot, and Chevron are worth considering. An investment of $3,500 in each of these Dow stocks could yield over $325 in passive income in 2025. This highlights the appeal of Dow stocks for those seeking steady returns in uncertain markets.