| Valuation method | Value, £ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | n/a | n/a |
| Intrinsic value (DCF) | n/a | |
| Graham-Dodd Method | n/a | |
| Graham Formula | 5.40 | -76 |
Dow Inc. (LSE: 0A1S.L) is a global leader in materials science, delivering innovative solutions for packaging, infrastructure, mobility, and consumer applications. Headquartered in Midland, Michigan, Dow operates through three key segments: Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials & Coatings. The company serves diverse industries, including construction, automotive, and consumer goods, with products ranging from polyethylene and polyurethane systems to architectural coatings and silicones. Dow's extensive geographic footprint spans North America, Europe, the Middle East, Africa, and Asia Pacific, positioning it as a critical player in the global chemicals sector. With a strong focus on sustainability and innovation, Dow continues to drive advancements in circular economy solutions, lightweight materials, and energy-efficient technologies. As a component of the Basic Materials sector, Dow plays a pivotal role in supplying essential chemicals that underpin modern industrial and consumer markets.
Dow Inc. presents a mixed investment profile. The company benefits from its diversified product portfolio, global scale, and leadership in key chemical markets, supported by a market capitalization of €17.5 billion. However, its financial performance in FY2023 reflects challenges, with net income of €578 million on €44.6 billion revenue, yielding a diluted EPS of €0.82. The company maintains moderate leverage (€16 billion debt against €3 billion cash) and generates solid operating cash flow (€5.2 billion), though capital expenditures are substantial (€2.7 billion). The 0.94 beta suggests slightly less volatility than the broader market. Dividend investors may find the €1.98/share payout attractive, but earnings coverage appears thin. Key risks include cyclical end markets, input cost volatility, and environmental regulatory pressures. The stock could appeal to investors seeking exposure to industrial recovery and materials innovation, but may underperform during economic downturns.
Dow Inc. competes in the highly fragmented global chemicals industry, where its primary advantages include: (1) Vertically integrated operations spanning feedstocks to specialty products, (2) Technological leadership in polymer science and material formulations, (3) Global manufacturing and distribution footprint enabling local supply, and (4) Strong R&D capabilities with 1,100+ patents annually. However, the company faces intense competition across segments. In packaging resins, Dow contends with commodity price pressures and regional competitors. Its industrial intermediates business competes on cost efficiency against integrated oil majors, while performance materials face rivalry from specialty chemical firms. Dow differentiates through application development expertise - for example, its market-leading position in flexible food packaging adhesives and high-performance silicones. The company's scale provides purchasing power for feedstocks like ethylene, but this advantage diminishes when oil prices are volatile. Sustainability initiatives (like mechanical recycling programs) are becoming a key battleground against European competitors with more advanced circular economy platforms. While Dow's diversified portfolio provides stability, it may lack focus compared to pure-play competitors in high-growth niches like battery materials or electronic chemicals.