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Here's What Makes DOW Stock a Solid Investment Option Now
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Key Takeaways
DOW shares rose 39.1% in the past six months, outperforming the industry.
Dow is focused on growth in attractive end markets and is gaining from cost and productivity initiatives.
DOW ended Q1 with about $14 billion in liquidity and returned $1.5 billion via dividends in 2025.
Dow Inc.’s (DOW - Free Report) shares have popped 39.1% over the past six months, outperforming the Zacks Chemicals Diversified industry’s rise of 22.9%. It has been benefiting from its cost and productivity initiatives, growth actions in attractive markets and advantaged feedstock positions amid a challenging macroeconomic backdrop.
We are positive about DOW’s prospects and believe that the time is right for you to add the stock to the portfolio, as it looks promising and is poised to carry the momentum ahead.
Image Source: Zacks Investment Research
Let's see what makes DOW stock an attractive investment option at the moment.
Positive Analyst Sentiment for DOW Stock
Earnings estimates for DOW have been going up over the past 60 days. The Zacks Consensus Estimate for 2026 has increased by 693.8%. The consensus estimate for second-quarter 2026 has also been revised 844.4% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
DOW’s Strong Growth Prospects
The Zacks Consensus Estimate for DOW’s 2026 earnings is pegged at $2.54, suggesting a 370.2% increase from the previous year’s tally. Earnings are projected to increase by 302.4% in second-quarter 2026.
DOW’s Valuation Looks Attractive
DOW’s shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential. Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value chemical stocks, DOW is currently trading at a trailing 12-month EV/EBITDA multiple of 12.38, cheaper compared with the industry average of 14.48. DOW also has a Value Score of B.
Image Source: Zacks Investment Research
Strategic Growth & Self-help Actions Aid Dow
DOW benefits from its differentiated portfolio and feedstock advantage in the Americas. It remains focused on investing in attractive areas. Its broad portfolio, significant low-cost feedstock positions, global footprint and market reach place it in an advantageous position against competitors. While Dow faces headwinds from heightened macroeconomic and geopolitical uncertainties, it remains focused on growth actions in attractive end markets and executing high-return incremental growth projects in cost-advantaged regions.
Dow is taking action to cut costs by $1 billion to drive margins. It expects to achieve the majority of the cost savings through reductions in direct and labor costs. Dow realized more than $400 million of benefits from these actions in 2025, with the remaining benefits expected by 2026.
DOW has launched the “Transform to Outperform” initiative to improve productivity, reduce complexity, streamline its end-to-end processes and enable improved returns. The plan targets at least $2 billion near-term operating EBITDA improvement, with two-thirds of the benefits expected to be realized from productivity improvements. The company expects EBITDA benefits of roughly $500 million from this program in 2026. It expects to deliver roughly $1.1 billion in benefits from self-help actions this year.
Dow, on its first-quarter call, stated that it is already witnessing strong positive momentum from its recently implemented pricing actions across all businesses and regions, along with supportive improvements in operating rates. The company added that it is leveraging its purpose-built asset base, established supply chain networks and strong operational reliability to continue prioritizing customers while navigating challenges related to the Middle East conflict.
DOW’s Solid Financial Health Supports Capital Allocation
DOW has a strong balance sheet and generates substantial cash flows, which enable it to finance its growth investments in higher-value businesses and regions, and drive shareholder value. It ended the first quarter with solid liquidity of around $14 billion, including cash and cash equivalents of roughly $4.1 billion. It generated solid cash flow from operating activities of roughly $1.1 billion in the first quarter.
DOW returned $1.5 billion to shareholders through dividends in 2025. Dow has a policy of returning roughly 45% of its operating net income through dividends. It paid $252 million in dividends in the first quarter. It has no substantial long-term debt maturities until 2029.
DOW’s Zacks Rank & Key Picks
DOW currently sports a Zacks Rank #1 (Strong Buy).
The Zacks Consensus Estimate for Nucor’s current-year earnings stands at $14.84 per share, implying an 92.5% year-over-year increase. NUE’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with an average surprise of 8.1%.
The consensus estimate for L.B. Foster’s current-year earnings is pegged at $1.74 per share, implying a 152.2% year-over-year increase. The Zacks Consensus Estimate for FSTR’s current-year earnings has been revised 12.3% higher over the past 60 days.
The Zacks Consensus Estimate for Albemarle’s current-year earnings is pegged at $12.39 per share, indicating a 1,668.4% year-over-year increase. ALB’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with an average surprise of 54.1%.
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Here's What Makes DOW Stock a Solid Investment Option Now
Key Takeaways
Dow Inc.’s (DOW - Free Report) shares have popped 39.1% over the past six months, outperforming the Zacks Chemicals Diversified industry’s rise of 22.9%. It has been benefiting from its cost and productivity initiatives, growth actions in attractive markets and advantaged feedstock positions amid a challenging macroeconomic backdrop.
We are positive about DOW’s prospects and believe that the time is right for you to add the stock to the portfolio, as it looks promising and is poised to carry the momentum ahead.
Image Source: Zacks Investment Research
Let's see what makes DOW stock an attractive investment option at the moment.
Positive Analyst Sentiment for DOW Stock
Earnings estimates for DOW have been going up over the past 60 days. The Zacks Consensus Estimate for 2026 has increased by 693.8%. The consensus estimate for second-quarter 2026 has also been revised 844.4% upward over the same time frame. The favorable estimate revisions instill investor confidence in the stock.
DOW’s Strong Growth Prospects
The Zacks Consensus Estimate for DOW’s 2026 earnings is pegged at $2.54, suggesting a 370.2% increase from the previous year’s tally. Earnings are projected to increase by 302.4% in second-quarter 2026.
DOW’s Valuation Looks Attractive
DOW’s shares are currently trading at a level that is lower than the industry average, suggesting that the stock still has upside potential. Going by the EV/EBITDA (Enterprise Value/ Earnings before Interest, Tax, Depreciation and Amortization) multiple, which is often used to value chemical stocks, DOW is currently trading at a trailing 12-month EV/EBITDA multiple of 12.38, cheaper compared with the industry average of 14.48. DOW also has a Value Score of B.
Image Source: Zacks Investment Research
Strategic Growth & Self-help Actions Aid Dow
DOW benefits from its differentiated portfolio and feedstock advantage in the Americas. It remains focused on investing in attractive areas. Its broad portfolio, significant low-cost feedstock positions, global footprint and market reach place it in an advantageous position against competitors. While Dow faces headwinds from heightened macroeconomic and geopolitical uncertainties, it remains focused on growth actions in attractive end markets and executing high-return incremental growth projects in cost-advantaged regions.
Dow is taking action to cut costs by $1 billion to drive margins. It expects to achieve the majority of the cost savings through reductions in direct and labor costs. Dow realized more than $400 million of benefits from these actions in 2025, with the remaining benefits expected by 2026.
DOW has launched the “Transform to Outperform” initiative to improve productivity, reduce complexity, streamline its end-to-end processes and enable improved returns. The plan targets at least $2 billion near-term operating EBITDA improvement, with two-thirds of the benefits expected to be realized from productivity improvements. The company expects EBITDA benefits of roughly $500 million from this program in 2026. It expects to deliver roughly $1.1 billion in benefits from self-help actions this year.
Dow, on its first-quarter call, stated that it is already witnessing strong positive momentum from its recently implemented pricing actions across all businesses and regions, along with supportive improvements in operating rates. The company added that it is leveraging its purpose-built asset base, established supply chain networks and strong operational reliability to continue prioritizing customers while navigating challenges related to the Middle East conflict.
DOW’s Solid Financial Health Supports Capital Allocation
DOW has a strong balance sheet and generates substantial cash flows, which enable it to finance its growth investments in higher-value businesses and regions, and drive shareholder value. It ended the first quarter with solid liquidity of around $14 billion, including cash and cash equivalents of roughly $4.1 billion. It generated solid cash flow from operating activities of roughly $1.1 billion in the first quarter.
DOW returned $1.5 billion to shareholders through dividends in 2025. Dow has a policy of returning roughly 45% of its operating net income through dividends. It paid $252 million in dividends in the first quarter. It has no substantial long-term debt maturities until 2029.
DOW’s Zacks Rank & Key Picks
DOW currently sports a Zacks Rank #1 (Strong Buy).
Other top-ranked stocks in the Basic Materials space are Nucor Corporation (NUE - Free Report) , L.B. Foster Company (FSTR - Free Report) and Albemarle Corporation (ALB - Free Report) , each carrying a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Nucor’s current-year earnings stands at $14.84 per share, implying an 92.5% year-over-year increase. NUE’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, with an average surprise of 8.1%.
The consensus estimate for L.B. Foster’s current-year earnings is pegged at $1.74 per share, implying a 152.2% year-over-year increase. The Zacks Consensus Estimate for FSTR’s current-year earnings has been revised 12.3% higher over the past 60 days.
The Zacks Consensus Estimate for Albemarle’s current-year earnings is pegged at $12.39 per share, indicating a 1,668.4% year-over-year increase. ALB’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with an average surprise of 54.1%.