You would think... however, this would require someone at Dow to have the ability to manage oil price in the long run. The current Chairman has predicted the troughs about 4 years early. When it comes to oil price, you are betting on the ability of management ot manage properly. What leads you to believe that they will do so?
Sure, oil price is high. Should this mean higher profits for Dow? Yes. Will it? Not likely. These higher oil prices will not have been anticipated by the Dow finance guys. So, the will not be ready to respond to them. The profit comes in planning and implementation. There isn't anyone left to do this. Period.
Yes, I agree HIGHER oil prices---higher than the highs of March, '05, what $57 or so per barrel...However, prices I believe are going to dip below $50, even close to $45 for awhile.
DOW management has already said (..can be found in one of the articles on YHOO's Dow Chemical news) that pricing power would remain strong through '05. Now, if they already had confidence that pricing power would remain strong, with their already respectable margins, then don't you think with falling crude margins will only IMPROVE ?
I see DOW going higher because of falling crude...Even though S&P's price expectation may be high at $67 still the price of all analysts who follow DOW come in at an average of about $58 and change....That's 13.5% higher than today's price I'm looking at..Throw in their 2.5% dividend yield and I think it's possible to gain 15% from here by year's end.
Start with you first Dan, Dow Chemical, buy or sell? >> I think Dow Chemical is buy here Sue. I mentioned earlier this year.....able to push through price increases, cash flow doubled with earnings up 6% with 12 p-e the outlook is very good. >>