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DOW's Stock Rallies 39% YTD: What's Driving the Upside?
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Key Takeaways
DOW stock has risen 39% YTD, beating its industry and the S&P 500 index.
DOW targets $1B in cost cuts and expects remaining savings to be realized by 2026.
DOW's Transform to Outperform plan targets $2B EBITDA improvement through productivity gains.
Dow Inc.’s (DOW - Free Report) shares have popped 39% year to date, outperforming the Zacks Chemicals Diversified industry’s rise of 23.6%. DOW has also topped the S&P 500’s roughly 10% increase over the same period.
DOW has been gaining from its cost-reduction and productivity improvement efforts, strategic expansion in high-growth markets and feedstock advantages, even as it navigates a challenging macroeconomic environment.
DOW’s YTD Price Performance
Image Source: Zacks Investment Research
Let’s take a look at the factors that are driving DOW stock.
DOW Gains on Strategic Growth & Self-help Actions
DOW benefits from its differentiated portfolio and advantaged feedstock positions 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.
The Zacks Consensus Estimate for Nucor’s current-year earnings stands at $15.71 per share, implying an 103.8% 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%.
View the Zacks #1 Rank List
Image: Bigstock
DOW's Stock Rallies 39% YTD: What's Driving the Upside?
Key Takeaways
Dow Inc.’s (DOW - Free Report) shares have popped 39% year to date, outperforming the Zacks Chemicals Diversified industry’s rise of 23.6%. DOW has also topped the S&P 500’s roughly 10% increase over the same period.
DOW has been gaining from its cost-reduction and productivity improvement efforts, strategic expansion in high-growth markets and feedstock advantages, even as it navigates a challenging macroeconomic environment.
DOW’s YTD Price Performance
Image Source: Zacks Investment Research
Let’s take a look at the factors that are driving DOW stock.
DOW Gains on Strategic Growth & Self-help Actions
DOW benefits from its differentiated portfolio and advantaged feedstock positions 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 Inc. Price and Consensus
Dow Inc. price-consensus-chart | Dow Inc. Quote
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 $15.71 per share, implying an 103.8% 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%.