Dow Chemical Under Pressure

The Dow Chemical Company (DOW) is the largest producer of plastics and the second-leading chemical company in the world.

Vertical integration keeps costs low. The company's recently completed joint venture agreement with Petrochemical Industries Company (PIC) of Kuwait is expected to reduce cyclicality in the chemical business. Further, its merger with Rohm and Haas will consolidate higher margin and higher growth specialty businesses and reduce volatility in earnings and cash flow.

However, high raw material costs have forced the company to temporarily idle or reduce production at several of its plants. Further, Dow has a high exposure to the commodity chemical cycle. We expect earnings to remain under pressure and rate the stock a Hold.

Read the full analyst report on DOW

Read the full analyst report on DOW