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1. Company Snapshot

1.a. Company Description

Dow Inc.provides various materials science solutions for packaging, infrastructure, mobility, and consumer applications in the United States, Canada, Europe, the Middle East, Africa, India, the Asia Pacific, and Latin America.It operates through Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials & Coatings segments.


The Packaging & Specialty Plastics segment provides ethylene, and propylene and aromatics products; and polyethylene, polyolefin elastomers, ethylene vinyl acetate, and ethylene propylene diene monomer rubbers.The Industrial Intermediates & Infrastructure segment offers ethylene oxides, propylene oxides, propylene glycol and polyether polyols, aromatic isocyanates and polyurethane systems, coatings, adhesives, sealants, elastomers, and composites.This segment also provides caustic soda, and ethylene dichloride and vinyl chloride monomers; and cellulose ethers, redispersible latex powders, and acrylic emulsions.


The Performance Materials and Coatings segment provides architectural paints and coatings, and industrial coatings that are used in maintenance and protective industries, wood, metal packaging, traffic markings, thermal paper, and leather; performance silicones and specialty materials; and silicone feedstocks and intermediates.It also engages in property and casualty insurance, as well as reinsurance business.Dow Inc.


was incorporated in 2018 and is headquartered in Midland, Michigan.

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1.b. Last Insights on DOW

Dow Inc. faced significant challenges over the past three months, driven by weak demand, high energy costs, and industry oversupply. The company's margins were pressured by elevated feedstock costs, European energy challenges, and competitive oversupply. To address these issues, Dow implemented cost cuts, asset sales, and a 50% dividend reduction. Additionally, the company is focused on operational efficiencies, cost-cutting, and non-core divestitures to strengthen its balance sheet. A securities fraud investigation was also announced, but no further details were provided.

1.c. Company Highlights

2. Dow's Q3 2025 Earnings: A Closer Look at Financial Performance

Dow reported net sales of $10 billion in Q3 2025, with EBITDA of $868 million, reflecting a sequential improvement. The company's EPS was better than expected, coming in at -$0.19 compared to estimates of -$0.31. The Packaging and Specialty Plastics segment saw operating EBIT of $199 million, decreasing year-over-year but increasing sequentially. Dow's commitment to shareholder returns is evident, with $249 million in dividends delivered during the quarter.

Publication Date: Oct -25

📋 Highlights
  • Sequential EBITDA Growth & Dividends: Q3 2025 EBITDA rose to $868 million (up from prior periods), while dividends totaled $249 million, underscoring shareholder returns.
  • Strategic Asset Transactions: Completed a $3 billion U.S. Gulf Coast infrastructure deal and $250 million in non-core divestitures, advancing strategic priorities.
  • Cost Savings Progress: Achieved $400 million in 2025 cost savings (on track for $1 billion by 2026), including $75 million in September 2025.
  • Liquidity Strength: Maintained $4.5 billion in cash and $10 billion in available liquidity post-$2.4 billion bond issuances, supporting operational flexibility.
  • Q4 Guidance & Margin Risks: Anticipates $725 million EBITDA for Q4 2025, offset by expected margin compression from higher feedstock costs despite cost actions.

Segment Performance

The Industrial Intermediates & Infrastructure segment net sales increased sequentially, driven by volume gains and lower planned maintenance activity. The Performance Materials & Coatings segment net sales were $2.1 billion, down 6% year-over-year, with operating EBIT decreasing due to upstream margin compression. Dow's near-term cash flow priorities include optimizing working capital, expected to release $200-300 million in cash in H2 2025.

Cash Flow and Liquidity

Dow completed bond issuances worth $2.4 billion and maintains a strong liquidity position with over $4.5 billion in cash and $10 billion in available liquidity. For Q4 2025, Dow expects EBITDA to be approximately $725 million, driven by cost actions and lower planned maintenance, but anticipates margin compression from feedstock costs.

Valuation and Outlook

With a P/E Ratio of -15.38 and an EV/EBITDA of 10.93, the market is pricing in a certain level of uncertainty. Dow's Dividend Yield is 9.88%, indicating an attractive return for income-seeking investors. The company's ROIC is 1.63%, and ROE is -6.58%, suggesting room for improvement in capital allocation. Dow's guidance for Q4 assumes $0.04 in ethane pricing, and the company is watching the impact of trade negotiations on ethane exports to China.

Growth Investments and Future Prospects

Dow expects $100 million to $200 million in run-rate earnings contribution from growth investments in the US Gulf Coast. The company still expects polyethylene demand to grow in excess of GDP, with a multiplier of around 1.4x. Analysts estimate next year's revenue growth at 2.9%, indicating a moderate pace of expansion.

3. NewsRoom

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Should You Buy the 3 Highest-Paying Dividend Stocks in the Dow Jones?

Dec -07

Source: fool.com

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NASDAQ Index, S&P 500 and Dow Jones Forecasts – US Indices Continue to See Buying Early

Dec -05

Source: fxempire.com

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Dow Jones forms risky pattern ahead of Fed, Adobe, and Oracle earnings

Dec -05

Source: invezz.com

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Evaluating Dow Stock's Actual Performance

Dec -04

Source: fool.com

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NASDAQ Index, S&P 500 and Dow Jones Forecasts – US Indices Quiet in Early Thursday Trading

Dec -04

Source: fxempire.com

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Stock Market Today: Dow Jones, Nasdaq Futures Advance Amid Cooling Labor Market—UiPath, Snowflake, Lululemon In Focus

Dec -04

Source: feeds.benzinga.com

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Buy Verizon, December's Ideal "Safer" Dog Of The Dow

Dec -03

Source: seekingalpha.com

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Dow Jones and Nasdaq Index: US Indices Diverge as Microsoft Drags Tech Stocks Today

Dec -03

Source: fxempire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (1.05%)

6. Segments

Packaging & Specialty Plastics

Expected Growth: 1.2%

The 1.2 growth in Packaging & Specialty Plastics from Dow Inc. is driven by increasing demand for sustainable packaging solutions, expansion in e-commerce, and growth in emerging markets. Additionally, Dow's innovation in specialty plastics, such as its ENLIST technology, is also contributing to the segment's growth.

Industrial Intermediates & Infrastructure

Expected Growth: 0.8%

The 0.8 growth in Industrial Intermediates & Infrastructure from Dow Inc. is driven by increased demand for sustainable solutions, recovery in industrial production, and pricing actions. Strong performance in Packaging & Specialty Plastics and Infrastructure end-markets also contributed to growth, supported by Dow's diversified portfolio and operational efficiency.

Performance Materials & Coatings

Expected Growth: 1.1%

The 1.1% growth in Performance Materials & Coatings from Dow Inc. is driven by increased demand for sustainable solutions, pricing actions, and benefits from operational efficiencies. Strong performance in Packaging & Specialty Plastics and Industrial Intermediates & Infrastructure segments also contributed to the growth, offset by some challenges in supply chain and raw material costs.

Corporate

Expected Growth: 0.0%

Dow Inc.'s 0.0% growth is driven by stable demand in packaging and infrastructure sectors, offset by challenges in automotive and industrial applications. The company's diversified portfolio and operational efficiency also contribute to its steady performance, with no significant growth catalysts or headwinds in the current market conditions.

7. Detailed Products

Ethylene

A key building block for the production of plastics, adhesives, and coatings.

Propylene

A versatile chemical used in the production of plastics, fibers, and fuels.

Styrene

A chemical used in the production of plastics, resins, and latex.

Silicones

A family of chemicals used in the production of adhesives, sealants, and coatings.

Polyurethanes

A family of chemicals used in the production of foams, coatings, and adhesives.

Acrylics

A family of chemicals used in the production of paints, coatings, and adhesives.

Chlor-Alkali

A family of chemicals used in the production of chlorine, caustic soda, and other chemicals.

Epoxy

A family of chemicals used in the production of adhesives, coatings, and composites.

8. Dow Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Dow Inc. operates in a industry where substitutes are available, but they are not a significant threat to the company's business. The company's products are specialized and have a high barrier to entry, making it difficult for substitutes to gain traction.

Bargaining Power Of Customers

Dow Inc. has a diverse customer base, which reduces the bargaining power of individual customers. The company's products are also highly specialized, making it difficult for customers to switch to alternative suppliers.

Bargaining Power Of Suppliers

Dow Inc. has a moderate level of dependence on its suppliers, particularly for raw materials. However, the company's size and scale of operations give it some bargaining power over its suppliers.

Threat Of New Entrants

The chemical industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to enter the market and compete with established players like Dow Inc.

Intensity Of Rivalry

The chemical industry is highly competitive, with several large players competing for market share. Dow Inc. faces intense competition from rivals such as BASF, DuPont, and LyondellBasell, which can lead to pricing pressure and reduced margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 46.92%
Debt Cost 4.51%
Equity Weight 53.08%
Equity Cost 10.41%
WACC 7.64%
Leverage 88.39%

11. Quality Control: Dow Inc. passed 2 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Westlake Chemical Partners

A-Score: 7.3/10

Value: 9.2

Growth: 3.1

Quality: 7.5

Yield: 10.0

Momentum: 4.0

Volatility: 10.0

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Nucor

A-Score: 5.1/10

Value: 6.5

Growth: 5.9

Quality: 4.7

Yield: 4.0

Momentum: 3.5

Volatility: 6.0

1-Year Total Return ->

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Martin Marietta Materials

A-Score: 5.1/10

Value: 1.9

Growth: 7.0

Quality: 5.8

Yield: 0.0

Momentum: 7.0

Volatility: 9.0

1-Year Total Return ->

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Dow

A-Score: 4.6/10

Value: 8.2

Growth: 2.7

Quality: 1.9

Yield: 10.0

Momentum: 0.0

Volatility: 4.7

1-Year Total Return ->

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LyondellBasell

A-Score: 4.2/10

Value: 4.0

Growth: 2.7

Quality: 2.6

Yield: 10.0

Momentum: 0.0

Volatility: 6.0

1-Year Total Return ->

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Celanese

A-Score: 3.4/10

Value: 7.9

Growth: 3.1

Quality: 3.9

Yield: 2.0

Momentum: 0.0

Volatility: 3.3

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

22.96$

Current Price

22.96$

Potential

-0.00%

Expected Cash-Flows