Dow Inc (DOW) Stock Forecast & Price Target

Dow is positioned for a constructive earnings recovery because the PE market appears to be stabilizing, with resilient domestic demand, stronger export volumes, and lower global supply support from conflicts in the Middle East. The company’s FY25 EBITDA of about $3.26B may mark trough earnings, while higher PE in Q2, roughly 90% North American PE operating rates, and a potential move toward 95% all point to improving utilization and pricing. Management’s TTO actions also strengthen the outlook, including a $700M in-year target, $500M in 2H savings, and about $2B in cumulative savings by 2028.

Dow is facing a weak fundamental setup because polyethylene supply remains long, with only partial and unconfirmed capacity rationalization while demand growth looks closer to 1.0x GDP or below, too slow to absorb 2-4% annual capacity additions. Its 3Q26 EBITDA of $1,553M was only in line, and the lowered Q3 guidance to about $1.55B reflected a roughly $300M PE pricing headwind and added supply pressure from stronger China production. The outlook is further constrained by the ~$7.5B Alberta cracker commitment, which threatens cash flow flexibility through 2030 and limits the chance for meaningful free cash flow conversion or multiple expansion.