Dow Inc.

Dow had a challenging quarter given the ongoing market dynamics. Although inflation rates have moderated, overall costs for the company remain elevated and there is a negatively affecting general business sentiment. Despite these factors, the company did manage to deliver an all-around beat in the result. Given the current economic environment, the company is responding proactively with targeted actions to deliver cost savings of $1 billion, including optimizing labor and service costs, implementing end-to-end process improvements, and shutting down select assets. The year’s first quarter is expected to align with the fourth-quarter performance, with discrete headwinds of $75 million. The company expects to decrease its total turnaround spending by $300 million and to increase capital expenditures to $2.2 billion, among other notable changes. We give Dow Inc. a ‘Hold’ rating with a revised target price.