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Dow Inc. (DOW) Laps the Stock Market: Here's Why

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In the latest market close, Dow Inc. (DOW - Free Report) reached $52.30, with a +1.06% movement compared to the previous day. This change outpaced the S&P 500's 0.59% gain on the day. On the other hand, the Dow registered a gain of 0.82%, and the technology-centric Nasdaq increased by 0.55%.

Prior to today's trading, shares of the materials science had gained 5.63% over the past month. This has lagged the Basic Materials sector's gain of 7.82% and the S&P 500's gain of 9.16% in that time.

The investment community will be closely monitoring the performance of Dow Inc. in its forthcoming earnings report. The company is forecasted to report an EPS of $0.39, showcasing a 15.22% downward movement from the corresponding quarter of the prior year. Our most recent consensus estimate is calling for quarterly revenue of $10.43 billion, down 12.07% from the year-ago period.

Regarding the entire year, the Zacks Consensus Estimates forecast earnings of $2.18 per share and revenue of $44.41 billion, indicating changes of -65.12% and -21.95%, respectively, compared to the previous year.

It is also important to note the recent changes to analyst estimates for Dow Inc. Such recent modifications usually signify the changing landscape of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. To utilize this, we have created the Zacks Rank, a proprietary model that integrates these estimate changes and provides a functional rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 1.35% lower within the past month. Currently, Dow Inc. is carrying a Zacks Rank of #3 (Hold).

In terms of valuation, Dow Inc. is currently trading at a Forward P/E ratio of 23.69. This signifies a premium in comparison to the average Forward P/E of 15.79 for its industry.

We can additionally observe that DOW currently boasts a PEG ratio of 4.74. The PEG ratio is akin to the commonly utilized P/E ratio, but this measure also incorporates the company's anticipated earnings growth rate. The Chemical - Diversified industry currently had an average PEG ratio of 2.31 as of yesterday's close.

The Chemical - Diversified industry is part of the Basic Materials sector. This industry, currently bearing a Zacks Industry Rank of 235, finds itself in the bottom 7% echelons of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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