Shares of the chemical giant, Dow (NYSE: DOW) inched up higher in morning trading on Monday after top-rated Deutsche Bank analyst David Begleiter upgraded the stock to a Buy from a Hold but left the price target unchanged at $60 a share. Begleiter’s price target implies an upside potential of 17.8% at current levels.
Begleiter pointed out, “The worst is behind or close to being behind the company. The plethora of investment positives far outweigh the investment negatives at this time.”
The analyst added that the uptick in Chinese demand has helped and the company is a low-cost producer of ethylene, a key chemical for making plastics and other materials, it is another significant competitive advantage for the company.
Begleiter commented, “With Dow’s dividend yield of 5.6%, investors are being paid to wait until market conditions improve and Dow’s earnings inflect upward. With the current yield near the 6.5% yield where Dow’s shares have historically troughed, we believe the risk/reward profile for the shares is attractive.”
Other analysts, however, remain sidelined about DOW stock with a Hold consensus rating based on three Buys, 12 Holds, and one Sell.