Dow Inc (DOW) Stock Forecast & Price Target

Dow is positioned favorably because its core PE market appears to be stabilizing, supported by resilient domestic demand, strong export volumes, and lower global supply disruptions, while North American operating rates remain around 90% and could approach 95%. The company also appears to be past the cycle trough, with FY25 EBITDA at about $3.26B versus a potential peak EBITDA range of $12–13B, suggesting significant operating leverage if tighter ethylene, polyethylene, and polyurethane markets persist through 2026 and 2027. In addition, Dow’s turnaround efforts are strengthening the earnings bridge, with around $700M in in-year TTO target, $500M targeted in 2H, and roughly $2B in cumulative TTO savings by 2028, which should improve margins and cash generation.

Dow is facing a weak fundamental backdrop because polyethylene supply remains long, permanent asset closures have slowed, and new olefins/polyolefins capacity additions in the USGC keep pressure on prices and margins. Demand assumptions also look too optimistic, as Europe is contracting, the U.S. is near zero, and China’s 3-5% growth implies only about 1-2% annual PE demand growth, well below the 2-4% capacity additions annually. On top of that, the company’s ~\$7.5B Alberta cracker commitment, elevated energy costs, and Q3 EBITDA guide cut to roughly \$1.5-1.6B underscore weaker cash conversion and limited near-term catalysts for multiple expansion.