Dow Inc. downgraded to Underperform at BofA on commodity chemical caution

As previously reported, BofA analyst Steve Byrne downgraded Dow Inc. (DOW) to Underperform from Neutral with a price target of $55, down from $64. U.S. commodity chemical companies have very back-half weighted earnings expectations for 2023, whether explicitly guided or not, and this weighting runs counter to normal seasonality considering how much of these businesses are tied to North American and European construction, the firm tells investors. However, economic momentum is not materializing and with a lack of economic momentum, feedstock deflation has set in, notes the firm, which has cut estimates across the commodity sub-sector, lowered targets for a number of commodity chemical stocks, and downgraded Dow to Underperform and cut its ratings on both Celanese (CE) and Chemours (CC) to Neutral.