DOW - Embedded Expectations Analysis - 2021 06 01
Dow Inc. (DOW:USA) currently trades below corporate averages relative toUAFRS-based (Uniform) earnings, with a 15.6x Uniform P/E. Even at these levels, the market is pricing in bullish expectations for the firm, but management may have concerns about sales growth, carbon emission reductions, and US EBITDA margins
Specifically, management may lack confidence in their ability to sustain overall sales growth as well as Consumer Solutions business sales growth. In addition, they may have concerns about the sustainability of strong demand in China and the pace of recovery of industrial customer orders in their Performance Materials & Coatings segment. Furthermore, management may lack confidence in their ability to meet their US EBITDA margin target and reduce carbon emissions. Finally, they may be overstating the potential of their silicone investments and share buyback strategy
Dow is a holding company. Through its subsidiaries, the company delivers science-based products and solutions for its customers. The company's segments are: Packaging and Specialty Plastics, which focuses on polyolefin product portfolio to deliver plastics to customers; Industrial Intermediates and Infrastructure, which produces and markets ethylene oxide and propylene oxide derivatives that are aligned to market segments as appliances, coatings, infrastructure and oil and gas; and Performance Materials and Coatings, which utilizes the company's acrylics-, cellulosics- and silicone-based technology platforms to serve the needs of the architectural and industrial coatings, home care and personal care end-markets.
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