UPDATE: BofA Securities Upgrades Dow Inc. (DOW) to Neutral
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BofA Securities analyst Steve Byrne upgraded Dow Inc. (NYSE: DOW) from Underperform to Neutral, PT $64.00 (from $53.00).
The analyst comments "Our new PE forecast, primarily for US, but also Europe, is resulting in higher estimates for DOW. The elevated expectations in the company’s Specialty Plastics & Packaging segment are however partially offset by expected propylene headwinds to DOW’s Coatings & Performance Monomers and Industrial businesses. The company should be able to benefit, to some degree, from its 1.7bn pounds of internal propylene production, but that covers less than half of DOW’s total propylene purchases. Finally, we are trimming the elevated forecast by $200mn, to compensate for outage expenses. Still, our 2021 and 2022 EBITDA estimates increase to $7,915mn and $7,237mn, up from $6,952mn and $7,146mn, respectively. Our PO increases from $53 to $64, based on a 7.5x ’21 EBITDA estimate multiple, enough to upgrade shares to Neutral from Underperform."
Shares of Dow Inc. closed at $60.39 yesterday.
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