Dow Inc. Shares: Can Cost-Cutting Fuel a Sustained Recovery?

The chemical sector continues to grapple with a challenging environment defined by elevated input costs and tepid demand. Dow Inc., a major player in materials science, finds itself at the center of this storm. As the company implements a rigorous cost-reduction strategy, investors are questioning whether these measures will be sufficient to reverse the persistent downward pressure on its stock.

Market analysts remain largely unconvinced that Dow's austerity drive will be a panacea. The prevailing consensus rating on the stock is "Hold." The average price target from 14 covering analysts sits at $26.00, suggesting only modest upside potential from current levels. However, this average masks a significant divergence in opinion. Citigroup, for instance, reduced its target to $23 in November, reflecting a more cautious outlook. On the other end of the spectrum, firms like Evercore ISI maintain a $32 target, signaling a more optimistic view of the company's prospects. The clear message from the expert community is one of skepticism; they are awaiting tangible proof that management can deliver on its promises.

Should investors sell immediately? Or is it worth buying Dow Inc?

A Cautious Outlook for the Final Quarter

Management's recent guidance for the closing quarter of 2025 did little to inspire confidence. Dow anticipates EBITDA will reach only approximately $725 million. Leadership cited typical seasonal softness and persistently high feedstock costs as the primary headwinds. These expensive raw materials continue to compress margins and weigh on earnings. In response, the company has committed to an aggressive savings program, targeting total cost reductions of $1 billion by 2026. A substantial portion of this goal, $400 million, is slated for realization within the current year.

The central question for shareholders is whether this historic dividend payer can engineer a turnaround through strict financial discipline. The coming quarters will be critical in determining if a billion-dollar savings initiative can offset the deep-seated structural challenges facing the industry. For investors, patience is the required virtue.