June 25, 2025 –
Dow Chemical Faces Mounting Challenges as Analyst Sentiment Turns Negative
AsiaMB Market Watch: BMO Capital Markets has delivered a sobering assessment of Dow Chemical’s prospects, downgrading the chemical giant’s stock rating from “Market Perform” to “Underperform” while slashing its price target by 24% to $22. This dramatic revision signals growing skepticism about Dow’s ability to navigate current market headwinds.
Structural Weaknesses Across Core Business Segments
The downgrade reflects fundamental concerns about Dow’s three primary divisions:
• Packaging & Specialty Plastics – grappling with polyethylene demand erosion
• Industrial Intermediates & Infrastructure – impacted by construction sector slowdown
• Performance Materials – facing margin compression
BMO analysts highlighted particular vulnerability in Dow’s polyethylene business, where trade policy volatility has created significant order volatility. AsiaMB industry sources note this segment’s struggles mirror broader challenges in the polymer additives sector.
Revised Financial Projections Paint Grim Picture
The investment firm’s revised estimates suggest:
• Q2 EBITDA forecast of 734M (19% below consensus) • 2026 earnings projection of 3.94B (21.5% under market expectations)
• Increasing likelihood of dividend reduction
“These aren’t cyclical issues but structural challenges that won’t resolve without macroeconomic improvement,” warned BMO analyst John McNulty in his client note seen by AsiaMB. His comments have amplified investor concerns about the company’s medium-term recovery potential.
The downgrade comes as the global chemicals sector faces:
• Chronic overcapacity issues
• Weak European and North American construction markets
• Persistent raw material cost pressures
Industry observers will closely monitor Dow’s upcoming strategic moves, with many questioning whether operational adjustments can offset these systemic challenges. As one of the bellwethers for the specialty chemicals market, Dow’s performance may signal broader trends for color masterbatch and polymer additive suppliers.