DOW
MaterialsDow Inc.
Price Chart
Market Data
Financials
XBRL · SEC EDGAR2017–2025(9yr)| Metric | FY 2017 | FY 2018 | FY 2019 | FY 2020 | FY 2021 | FY 2022 | FY 2023 | FY 2024 | FY 2025Latest | YoY |
|---|---|---|---|---|---|---|---|---|---|---|
| Revenue | $43.7B | $49.6B | $43.0B | $38.5B | $55.0B | $56.9B | $44.6B | $43.0B | $40.0B | -7.0% |
| Gross Profit | $7.4B | $8.5B | $6.3B | $5.2B | $10.8B | $8.6B | $4.9B | $4.6B | $2.5B | -45.0% |
| Gross Margin | 16.9% | 17.2% | 14.7% | 13.5% | 19.6% | 15.1% | 10.9% | 10.7% | 6.3% | -4.4pp |
| Net Income | $595.0M | $4.8B | -$1.3B | $1.3B | $6.4B | $4.6B | $660.0M | $1.2B | -$2.4B | -303.5% |
| Net Margin | 1.4% | 9.6% | -3.0% | 3.4% | 11.7% | 8.2% | 1.5% | 2.8% | -6.1% | -8.9pp |
| Free Cash Flow | -$7.7B | $2.2B | $4.0B | $5.0B | $5.5B | $5.7B | $2.8B | -$26.0M | -$1.4B | -5465.4% |
| FCF Margin | -17.7% | 4.4% | 9.2% | 12.9% | 10.0% | 9.9% | 6.4% | -0.1% | -3.6% | -3.6pp |
| EPS (Diluted) | $0.60 | $6.21 | $-1.84 | $1.64 | $8.38 | $6.28 | $0.82 | $1.57 | $-3.70 | -335.7% |
1. THE BIG PICTURE
Dow is a materials giant currently caught in a pincer movement between a global supply glut and an "unprecedented industry downturn" (8-K). While management points to its integrated value chain as a defensive shield, Dow Inc. is currently losing money on every dollar of sales, forcing a radical $1 billion cost-cutting program to preserve its position.
2. WHERE THE RISKS HIT HARDEST
Dow’s "unparalleled scale" and "world-class manufacturing" (10-K Item 1) are currently being undermined by a global supply/demand imbalance. The addition of large-scale production capacity in Asia Pacific and EMEAI has created excess supply that exerts downward pressure on prices, effectively neutralizing the competitive advantage of Dow’s massive asset base (10-K Item 1A). Furthermore, its "extensive low-cost feedstock positions" are threatened by shifting trade policies and retaliatory tariffs, which disrupt the global supply chains Dow relies on to maintain its cost edge (10-K Item 1A).
3. WHAT THE NUMBERS SAY TOGETHER
The financial data reveals a company struggling with efficiency compared to its peers. Dow reports the lowest gross margin (7.4%) and the lowest operating margin (-3.1%) in its peer group (XBRL). While Dow Inc. markets its "feedstock flexibility" as a tool to reduce volatility, its -2.7% free cash flow margin suggests this flexibility is not currently translating into cash preservation (XBRL).
The most recent quarterly revenue decline of 9% is steeper than the trailing twelve-month decline of 7%, indicating that the downturn is accelerating rather than stabilizing (8-K). With short interest at 4.0% of the float, there is a measurable level of market skepticism regarding the speed of a recovery. Despite these headwinds, Dow maintains a 5.1% dividend yield, the second-highest among its peers, though this payout is not currently supported by positive free cash flow (XBRL).
4. IS IT WORTH IT AT THIS PRICE?
At a Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations of 49.5x, Dow trades at a massive 209% premium to the peer median of 16.0x (Yahoo Finance). This valuation is difficult to reconcile with a company reporting negative net margins and shrinking sales. According to the (CAPM analysis), the market is pricing in roughly 6.4% long-term growth.
This implied growth rate is highly ambitious given that Dow's current revenue growth is -7.0% and its operating margin is negative. For this price to be justified, the "Transform to Outperform" program must successfully deliver the promised $2 billion in additional near-term earnings (8-K). If growth instead aligns with a standard GDP pace of 2.5%, the justified multiple would drop to 16.9x, suggesting significant downside risk if the turnaround stalls (CAPM analysis). Investors are paying a premium for a cyclical recovery that has yet to appear in the quarterly results.
5. WHAT WOULD CHANGE THIS VIEW?
- Constructive if the "Transform to Outperform" initiative produces a measurable expansion in operating margins toward the peer median of 6.5% within the next two quarters.
- Cautious if free cash flow remains negative, as the 5.1% dividend yield would eventually require debt financing or a payout cut.
- Cautious if the strategic review of European assets results in further site shutdowns or significant impairment charges beyond the current restructuring plan (10-K Item 1).
6. BOTTOM LINE
Structural Advantage: Massive scale and "unrivaled value chain ownership" in the ethylene-to-polyethylene production process.
Bottom Line: Dow is a high-cost turnaround play trading at an extreme valuation premium that the current negative earnings and shrinking revenue do not justify.
1. Top 5 Material Risks
- Climate Change: Dow Inc. faces risks from severe weather events that can disrupt operations and limit site access. The transition to lower-emission technology and carbon pricing could increase operating costs, while failure to meet 2030 and 2050 carbon reduction commitments could damage Dow Inc.'s reputation and limit access to financing.
- Global Economic Conditions: As a global competitor, Dow Inc. is sensitive to macroeconomic uncertainty, which has already led to decreased sales prices and volumes. Dow Inc.’s results are impacted by inflationary pressures, supply chain constraints, and geopolitical conflicts, such as those in the Middle East and between Russia and Ukraine.
- Trade Policy and Tariffs: Changes in U.S. trade policies and the resulting retaliatory tariffs from trading partners have created market volatility. These actions impact sales volume, pricing, and production costs, while also disrupting global supply chains and long-term planning.
- Supply/Demand Imbalance: The chemical industry is cyclical, and the addition of new, large-scale capacity—particularly in EMEAI and Asia Pacific—has created excess supply. This imbalance exerts downward pressure on prices and reduces operating rates.
- Environmental Compliance: Dow Inc. is subject to extensive regulations regarding pollution and hazardous waste. Compliance costs are evolving, and actual or alleged violations could result in significant civil or criminal sanctions, or strict liability for remediation at past and current sites.
2. Company-Specific Risks
- Asbestos Liability: Union Carbide, a subsidiary of Dow Inc., faces ongoing asbestos-related litigation. As of December 31, 2025, the total liability for these claims, including defense and processing costs, was $708 million.
- Plastic Waste and Circularity: Dow Inc. is one of the world’s largest plastics producers and faces risks from the lack of recycling infrastructure and potential regulations like extended producer responsibility fees. Dow Inc. has committed to commercializing 3 million metric tons of circular and renewable solutions by 2030 to mitigate these pressures.
- Cybersecurity: Dow Inc. relies on complex information systems and AI to manage operations and proprietary data. While past cyberattacks have not had a material impact, Dow Inc. remains vulnerable to sophisticated threats that could compromise trade secrets or disrupt manufacturing.
- Feedstock Volatility: Dow Inc. relies on hydrocarbon-based raw materials like ethane and naphtha. While Dow Inc. uses hedging programs, it cannot always pass on cost increases to customers, meaning volatility in crude oil and natural gas prices directly impacts operating costs.
3. Regulatory/Legal Risks
- Plastic Pollution Treaty: An intergovernmental committee is currently negotiating a legally binding international instrument to end plastic pollution, which could lead to new restrictive regulations on Dow Inc.'s products.
- Environmental Remediation: Dow Inc. faces potential costs related to the remediation of past and current sites. Management notes that ultimate costs could be significantly higher than current accruals.
- Chemical Safety Regulations: Governments are proposing new regulations regarding the security of chemical plant locations and the transportation of hazardous chemicals, which could increase operating costs.
4. Financial Impact Map
- Climate Change → Results of Operations → Increased costs to maintain operations or achieve sustainability commitments.
- Global Economic Conditions → Sales Price and Volume → Decreased demand and lower pricing due to inflationary pressures and market uncertainty.
- Trade Policy and Tariffs → Results of Operations → Negative impact on sales volume and production costs due to tariffs and supply chain disruptions.
- Supply/Demand Imbalance → Results of Operations → Downward pressure on prices and decreased operating rates due to excess industry capacity.
- Environmental Compliance → Financial Condition → Potential for significant unanticipated costs or liabilities from remediation and regulatory enforcement.
Recent Filings
| Form | Filed | Period |
|---|---|---|
| 14A | Feb 2026 | — |
| 10-K | Feb 2026 | Dec 2025 |
| 8-K | Jan 2026 | — |
| 10-Q | Oct 2025 | Sep 2025 |
AI-extracted key facts from press releases and SEC filings. Significance 1–10.
Dow shares rally 75% YTD on restructuring gains and geopolitical supply shock pricing power
- ▸Transform to Outperform program targets $2B in near-term operating EBITDA gains
- ▸Restructuring includes 4,500 job reductions to drive productivity and cost savings
- ▸FY2025 net sales $40B with $2.4B GAAP net loss
- ▸Petrochemical supply shortages from Iran conflict driving higher realized prices
- ▸Annual dividend $1.40 per share, following 50% cut in July 2024
Dow Inc. targets $1B in annual cost reductions by 2026 amid petrochemical supply constraints
- ▸Targeting $1B in annual cost reductions by 2026
- ▸Petrochemical shortages linked to Middle East tensions driving input cost inflation
- ▸Projecting $43.6B revenue and $1.5B earnings by 2028
- ▸Current earnings at -$994M with reduced dividend policy
- ▸Delaying capital-intensive projects like Path2Zero to prioritize cash flow
Dow Inc. price target raised 43% to $40 by Citigroup, rating upgraded to Buy
- ▸Citigroup raised DOW price target 43% from $28 to $40
- ▸Rating upgraded from neutral to buy
- ▸EBITDA growth projected at 22% by Citigroup
- ▸Dividend of $0.35 per share payable March 13
- ▸Share price rose 9.34% to $37.58 following analyst note
S&P 500 Drops 1.22% as WTI Crude Surges 9% Amid Middle East Conflict
- ▸WTI crude oil prices +9% following Middle East supply disruptions
- ▸Morgan Stanley and Cliffwater cap withdrawals from private credit funds
- ▸IEA reports 7.5% of global oil supply disrupted by conflict
- ▸US weekly jobless claims 213,000, below expected 215,000
- ▸Jan housing starts +7.2% to 1.487 million, 11-month high
WTI Crude Oil Surges 8% Amid Middle East Supply Disruptions, Equities Decline
- ▸WTI crude oil prices +8% following Strait of Hormuz supply disruptions
- ▸Global oil supply cut by 8 million bpd due to regional conflict
- ▸S&P 500 down -0.88%, Dow -1.06%, Nasdaq 100 -1.03%
- ▸US Jan housing starts +7.2% to 1.487 million, 11-month high
- ▸10-year T-note yield +1.6 bp to 4.245%, 5-week high