CFRA, an independent research provider, has provided MT Newswires with the following research alert. Analysts at CFRA have summarized their opinion as follows:
We lower our 12-month price target by $1 to $53 on a forward P/E of 14.7x our 2024 EPS estimate, in line with the five-year average. We lower our 2023 EPS estimate by $0.32 to $2.28, 2024’s by $0.48 to $3.64 and set 2025’s at $4.59. Q3 sales declined 24% Y/Y on lower volumes (-6%), mainly due to lower merchant hydrocarbons and energy sales, as well as local price declines (-18%) due to lower feedstock and energy costs. DOW posted Q3 EPS of $0.48, beating consensus by $0.04. We believe DOW will continue to face demand and price challenges throughout the rest of the year, with slower-than-expected recovery in China, weak demand in Europe, and mixed indications in the U.S. That said, we expect auto sales and production to be a bright spot, particularly in China, as well as favorable polyethylene/olefin pricing in 2024. We note DOW has a strong balance sheet, with no long-term debt maturities until 2027, and returned nearly $2 billion to shareholders YTD via dividends and share buybacks, which we view favorably.