Dow Inc

Dow Inc (NYSE: DOW) operates as the parent company of The Dow Chemical Company and its subsidiaries, managing its activities through six global business units. These operations are structured into key segments, including Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials & Coatings.

Key Business Updates

• Decline in Overall Financial Performance: Dow Inc. reported second-quarter 2025 net sales of USD 10.1 billion, a 7% year-over-year decline, reflecting decreases across all operating segments. Sequentially, sales fell 3%, as seasonal gains in Performance Materials & Coatings were offset by weakness in other segments. The contraction was driven by lower local prices, down 7% year-over-year and 3% sequentially, coupled with a modest 1% decline in volume. Regional performance was mixed, with volume growth in the U.S. and Canada offset by declines across Europe, the Middle East, Africa, and India (EMEAI).
• Margin Compression and Profitability Challenges: The company posted a GAAP net loss of USD 801 million, compared to a profit of USD 458 million in the prior year, reflecting margin compression from lower prices and reduced equity earnings. Operating EBIT turned negative at USD 21 million, down USD 840 million year-over-year and USD 251 million sequentially, as gains from cost reduction initiatives and favorable currency effects were outweighed by weaker integrated margins in Packaging & Specialty Plastics. Operating EPS was a loss of USD 0.42, compared to earnings of USD 0.68 in 2Q24, excluding significant charges primarily related to restructuring and asset impairments.
• Cash Flow and Shareholder Returns: Operating cash flow from continuing operations was negative USD 470 million, reflecting a USD 1.3 billion decline year-over-year and a USD 574 million decline sequentially, primarily due to lower earnings and tighter margins. Despite these challenges, Dow continued to return value to shareholders, disbursing USD 496 million in dividends during the quarter. However, management also announced adjustments to the dividend policy to preserve financial flexibility amid a prolonged low-earnings environment.
• Segment Performance: Packaging & Specialty Plastics: Net sales in the Packaging & Specialty Plastics segment declined 9% year-over-year to USD 5.0 billion, driven by a 10% drop in local prices and the impact of portfolio divestitures, partly offset by a 1% increase in volume and positive currency effects. Operating EBIT fell sharply to USD 71 million, down USD 632 million year-over-year, due to lower integrated margins and joint venture performance. Sequentially, earnings declined USD 271 million, reflecting reduced merchant ethylene sales following the startup of the Poly-7 polyethylene facility in the U.S. Gulf Coast. This investment is expected to strengthen long-term margins through improved downstream integration.
• Segment Performance: Industrial Intermediates & Infrastructure: The Industrial Intermediates & Infrastructure segment reported net sales of USD 2.8 billion, down 6% from the prior year, with a 5% decline in local prices and 2% lower volume. The segment recorded an Operating EBIT loss of USD 185 million, compared to a gain of USD 7 million in 2Q24, primarily due to lower prices and higher maintenance costs. Equity losses widened to USD 39 million, driven by weaker margins at the Kuwait joint ventures. Sequentially, results were also weaker, impacted by seasonal volume declines and commissioning activities at the Seadrift, TX Alkoxylation unit, which has now reached mechanical completion.
• Segment Performance: Performance Materials & Coatings: The Performance Materials & Coatings segment posted net sales of USD 2.1 billion, a 5% decline year-over-year, with lower prices and volumes partially offset by favorable currency movements. Sequentially, sales rose 3%, supported by seasonal demand for architectural coatings and growth in downstream silicones. Operating EBIT increased to USD 152 million, up from USD 49 million in the prior quarter, reflecting margin improvement from lower input costs and efficiency gains. The Consumer Solutions business benefited from stronger mobility and personal care demand, while Coatings & Performance Monomers saw modest gains from seasonally higher coatings activity despite continued housing market weakness.
• Strategic Outlook and Management Actions: Management reaffirmed its focus on cost discipline, asset optimization, and portfolio realignment to counter ongoing macroeconomic and competitive pressures. CEO Jim Fitterling highlighted that the company’s strategic actions, including restructuring initiatives and targeted investments, are expected to deliver over USD 6 billion in cash and earnings growth levers by 2026. Dow continues to advance new capacity and integration projects that will enhance its position in higher-value applications less exposed to anti-competitive pricing dynamics. The company remains committed to maintaining financial flexibility, competitive shareholder returns, and operational excellence as the industry navigates an extended period of subdued market conditions.

Technical Observation (on the daily chart):

Dow Inc.’s stock remains in a persistent downtrend, trading at USD 20.65 and staying below its 20-day and 50-day moving averages, reflecting continued bearish momentum. The RSI near 20 indicates oversold conditions, hinting at a possible short-term rebound; however, the overall trend remains weak.

Despite near-term earnings pressure from weaker pricing and global demand softness, Dow’s second-quarter performance underscores its proactive strategic response to industry headwinds. The Company is executing decisive cost reductions, optimizing its portfolio—particularly through the startup of its Poly-7 polyethylene facility—and advancing high-value growth projects aimed at improving integration and margin resilience. Management’s focus on operational excellence, financial discipline, and long-term portfolio realignment positions Dow to unlock over USD 6 billion in cash and earnings growth levers by 2026, ensuring stronger competitiveness and enhanced shareholder value as market conditions recover.

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Dow Inc (NYSE: DOW) at the closing market price of USD 20.65 as of Oct 10,2025. 

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing.

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is October 10,2025. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level that the stock is expected to reach as per the relative valuation method and or technical analysis taking into consideration both short-term and long-term scenarios.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the New York Stock Exchange (NYSE), NASDAQ Capital Markets (NASDAQ), and or REFINITIV. Typically, all sources (NYSE, NASDAQ, or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.