Rothschild Redburn Upgrades Dow (DOW) to Buy on Polyethylene Recovery Potential

Dow Inc. (NYSE:DOW) is one of the best falling stocks to buy now. On August 5, Rothschild Redburn raised Dow stock from a “Neutral” to a “Buy” rating. The firm also revised its price target downward from $65 to $40. Rothschild Redburn cited “relatively higher cyclical upside potential” for Dow compared to competitor Lyondell, which the firm said was driven by expectations of recovering polyethylene margins while polypropylene margins remain low.

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The firm noted that Dow’s recent dividend cut, reducing the quarterly dividend by 50% to 35 cents per share, reset its capital allocation strategy. This action provided flexibility for debt repayment and a new share buyback program. Rothschild Redburn described Dow’s stock as being at a “trough free cash flow-based valuation” and below mid-cycle and replacement cost levels, and the firm sees the stock as offering an attractive risk/reward profile.

Dow Inc. (NYSE:DOW) is a global materials science company. It manufactures and markets performance chemicals, industrial intermediates, and plastics used in packaging, infrastructure, mobility, and consumer applications. Through its Packaging & Specialty Plastics segment, Dow supplies polyethylene and other ethylene derivatives critical to modern agriculture, including crop protection packaging, greenhouse films, and irrigation components.

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Disclosure: None. This article is originally published at Insider Monkey.