BMO Capital Markets has downgraded shares of Dow Inc. (NYSE: DOW) from Market Perform to Underperform, citing sustained softness across key segments and downside risk to both earnings and dividends. The firm slashed its price target to $22, implying a total return of -11%, with premarket shares down nearly 2% following the note.

Key Takeaways:

• Weak End Markets: Demand across Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure, and Performance Materials remains tepid.

• Tariff Headwinds: Trade uncertainty has reduced polyethylene volumes and run rates.

• Structural Overhangs: Chinese oversupply and muted construction in the U.S. and Europe are seen as long-term drags.

• EBITDA Revision:

  • Q2: Cut to $734 million vs. Street's $908 million

  • Q3: Forecast at $848 million vs. $1.13 billion consensus

  • FY2026: Projected $3.94 billion vs. $5.02 billion consensus

• Dividend Risk: BMO flags heightened probability of a dividend cut if macro headwinds persist.

“Many of the issues are structural in nature, making it difficult to have a snap-back in earnings barring a macro bounce,” noted BMO's John McNulty.

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