Barclays Maintains an 'Equalweight' on Dow Chemical (DOW); Lowering Near-Term Earnings on Olefin Margin Weakness

Barclays maintains an 'Equalweight' on Dow Chemical (NYSE: DOW) price target cut $1 to $33.00.

Barclays analyst says, "Dow's major commodity exposure, the olefins chain, is suffering a short-term earnings pinch resulting in lower Q4 and 1H 2012 EPS. Intrinsic value is little affected. Two factors are conspiring to impinge the near-term olefins margins: a)lower prices due to sluggish demand (greatly impacted by inventory destocking); and b) tighter-than-expected ethane markets leading to higher priced feedstocks. Both of these issues will hit a positive inflection point in 1H'12, as we believe ethane will loosen starting in the spring plant turnaround period, and apparent demand will strengthen in the next several months as inventory destocking runs its course."

(Barclays lowers FY11 EPS estimate from $2.85 to $2.54 and FY12 from $3.05 to $2.67)

For more ratings news on Dow Chemical click here and for the rating history of Dow Chemical click here.

Shares of Dow Chemical closed at $28.18 yesterday.

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