Dow Inc. DOW is slated to give you fourth-quarter 2024 outcomes earlier than the opening bell on Jan. 30. Whereas DOW is anticipated to have benefited from its value and productiveness initiatives, comfortable demand as a consequence of weak world financial actions and pricing headwinds are more likely to have weighed on its fourth-quarter efficiency.
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The Zacks Consensus Estimate for fourth-quarter earnings has been revised 28.6% downward up to now 60 days. The consensus estimate for earnings is pegged at 25 cents per share, suggesting a 41.9% year-over-year decline.
Picture Supply: Zacks Funding Analysis
DOW surpassed the Zacks Consensus Estimate in three of the trailing 4 quarters and missed as soon as. It has a trailing four-quarter earnings shock of roughly 5.8% on common.
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This fall Earnings Whispers for DOW Inventory
Our confirmed mannequin doesn’t conclusively predict an earnings beat for DOW this season. The mix of a optimistic Earnings ESP and a Zacks Rank #1 (Robust Purchase), 2 (Purchase) or 3 (Maintain) will increase the probabilities of an earnings beat. However that’s not the case right here. You may uncover the most effective shares to purchase or promote earlier than they’re reported with our Earnings ESP Filter.
Dow has an Earnings ESP of -13.84% and a Zacks Rank #5 (Robust Promote). You may see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Components Shaping DOW’s This fall Outcomes
Dow is anticipated to have confronted headwinds from demand softness in Europe and China within the quarter to be reported. Decrease client spending amid inflationary pressures is affecting demand in Europe. Demand in Asia has been impacted by weaker demand restoration in China. The property sector stays sluggish in China, with declining new dwelling costs.
Inflationary pressures are impacting client durables and constructing and development demand. Demand in infrastructure, together with residential development, stays weak. Dow can be seeing softness in automotive in Europe and China as a consequence of low demand. Delicate situations throughout these markets are more likely to have impacted volumes within the fourth quarter.
Dow can be being challenged by weaker costs in its Efficiency Supplies & Coatings unit, which is more likely to have weighed on the phase’s margins. The unit faces challenges from weaker siloxane costs partly as a consequence of provide additions in Asia.
Nonetheless, Dow is anticipated to have benefited from cost-saving and productiveness actions within the fourth quarter. DOW is implementing focused actions targeted on optimizing labor and bought service prices, decreasing turnaround spending and boosting productiveness. The advantages of DOW’s restructuring applications are more likely to be mirrored in its backside line within the to-be-reported quarter.
Dow Inventory’s Worth Efficiency and Valuation
DOW’s shares have tumbled 22.5% over the previous yr, underperforming the Zacks Chemicals Diversified business’s 1.9% decline and the S&P 500’s improve of 24.8%. Its friends, LyondellBasell Industries N.V. LYB has misplaced 17.4%, whereas Eastman Chemical Firm EMN and BASF SE BASFY have gained 11.2% and 0.7%, respectively, over the identical interval.
DOW’s One-year Worth Efficiency
Picture Supply: Zacks Funding Analysis
From a valuation standpoint, DOW is presently buying and selling at a ahead worth/earnings of 15.41X, a roughly 6% low cost when stacked up with the business’s common of 16.39X.
Picture Supply: Zacks Funding Analysis
Funding Thesis for DOW Inventory
DOW advantages from its differentiated portfolio and low-cost feedstock positions. It stays targeted on investing in enticing areas by means of extremely accretive tasks. Disciplined and balanced capital allocation priorities additionally help its Decarbonize and Develop technique. Dow stays targeted on sustaining value and operational self-discipline. It additionally has a robust stability sheet and generates substantial money flows, which permit it to fund its progress investments and drive shareholder worth.
Dow faces challenges from comfortable demand situations triggered by elevated inflation, low client confidence throughout Europe and China, and geopolitical tensions, significantly in constructing and development and sturdy items markets. Elevated business provide can be impacting siloxane costs, affecting its Efficiency Supplies & Coatings unit.
How Ought to Buyers Play the DOW Inventory?
Whereas DOW advantages from its value and productiveness actions and funding in high-return tasks, it’s uncovered to weak demand in a difficult setting and pricing headwinds, which have led to its underperformance. This, coupled with declining earnings estimates, solid a pall on the corporate’s prospects. Subsequently, it’s prudent to keep away from DOW inventory forward of the earnings launch till market situations enhance.
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Today, See These 5 Potential Home Runs >>
Dow Inc. (DOW) : Free Stock Analysis Report
BASF SE (BASFY) : Free Stock Analysis Report
Eastman Chemical Company (EMN) : Free Stock Analysis Report
LyondellBasell Industries N.V. (LYB) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the creator and don’t essentially replicate these of Nasdaq, Inc.
