JPMorgan downgraded Dow Inc. (DOW) to Neutral from Overweight with a price target of $31, down from $40. The U.S. exports more polyethylene to China than to any other country, and Dow is in the most difficult position of the petrochemical companies, the analyst tells investors in a research note. The firm says petrochemical demand is “faltering,” raw material costs are rising, trade risk is increasing, global economic strength is weakening, and the company has a “large and expensive” multi-year capital deployment agenda in Canada. It is a project that is difficult to delay or cancel without meaningful penalty, contends JPMorgan.
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