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

Mar 1, 2024

The latest trading session saw Dow Inc. DOW ending at $55.88, denoting a +1.42% adjustment from its last day’s close. The stock exceeded the S&P 500, which registered a gain of 0.52% for the day. On the other hand, the Dow registered a gain of 0.12%, and the technology-centric Nasdaq increased by 0.9%.

Shares of the materials science witnessed a gain of 2.8% over the previous month, beating the performance of the Basic Materials sector with its loss of 0.45% and underperforming the S&P 500’s gain of 3.85%.

The upcoming earnings release of Dow Inc. will be of great interest to investors. The company’s earnings per share (EPS) are projected to be $0.47, reflecting a 18.97% decrease from the same quarter last year. Alongside, our most recent consensus estimate is anticipating revenue of $10.7 billion, indicating a 9.75% downward movement from the same quarter last year.

For the full year, the Zacks Consensus Estimates are projecting earnings of $3.12 per share and revenue of $44.73 billion, which would represent changes of +39.29% and +0.23%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for Dow Inc. Recent revisions tend to reflect the latest near-term business trends. As a result, upbeat changes in estimates indicate analysts’ favorable outlook on the company’s business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

The Zacks Rank system, which varies between #1 (Strong Buy) and #5 (Strong Sell), carries an impressive track record of exceeding expectations, confirmed by external audits, with stocks at #1 delivering an average annual return of +25% since 1988. Over the last 30 days, the Zacks Consensus EPS estimate has moved 1.09% lower. Dow Inc. is currently a Zacks Rank #3 (Hold).

From a valuation perspective, Dow Inc. is currently exchanging hands at a Forward P/E ratio of 17.68. This denotes a discount relative to the industry’s average Forward P/E of 17.98.

We can additionally observe that DOW currently boasts a PEG ratio of 0.76. Comparable to the widely accepted P/E ratio, the PEG ratio also accounts for the company’s projected earnings growth. By the end of yesterday’s trading, the Chemical – Diversified industry had an average PEG ratio of 1.44.

The Chemical – Diversified industry is part of the Basic Materials sector. Currently, this industry holds a Zacks Industry Rank of 225, positioning it in the bottom 11% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

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