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Dow Inc. (DOW) Gains But Lags Market: What You Should Know

·3 min read

Dow Inc. (DOW) closed at $50.93 in the latest trading session, marking a +0.83% move from the prior day. The stock lagged the S&P 500's daily gain of 1.06%. Meanwhile, the Dow gained 0.71%, and the Nasdaq, a tech-heavy index, added 0.18%.

Coming into today, shares of the materials science had lost 9.69% in the past month. In that same time, the Basic Materials sector gained 2.82%, while the S&P 500 lost 1.14%.

Investors will be hoping for strength from Dow Inc. as it approaches its next earnings release, which is expected to be October 20, 2022. On that day, Dow Inc. is projected to report earnings of $1.66 per share, which would represent a year-over-year decline of 39.64%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $14.5 billion, down 2.25% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.74 per share and revenue of $58.76 billion. These totals would mark changes of -13.81% and +6.89%, respectively, from last year.

Any recent changes to analyst estimates for Dow Inc. should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 1.65% lower. Dow Inc. is currently a Zacks Rank #3 (Hold).

Investors should also note Dow Inc.'s current valuation metrics, including its Forward P/E ratio of 6.53. This represents a discount compared to its industry's average Forward P/E of 9.92.

Also, we should mention that DOW has a PEG ratio of 0.22. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Chemical - Diversified was holding an average PEG ratio of 1.09 at yesterday's closing price.

The Chemical - Diversified industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 150, which puts it in the bottom 41% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow DOW in the coming trading sessions, be sure to utilize Zacks.com.


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