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How Analysts Are Viewing Dow Chemical after 1Q17

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Analyst recommendations for Dow Chemical

On April 24, 2017, 21 brokerage companies were actively tracking Dow Chemical (DOW) stock. About 76.0% of them recommended a “buy” for the stock, and 24.0% recommended a “hold.” None of them have recommended a “sell.”

Analysts’ consensus indicates a 12-month target price of $70.53 for Dow Chemical. That implies a return potential of 11.6% from the closing price of $63.19 on April 27, 2017.

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Analysts appear to be optimistic

With Dow Chemical posting better-than-expected earnings in 1Q17 and the news of conditional approval from the European Commission, analysts expect the proposed merger between Dow Chemical (DOW) and DuPont (DD) to go through. Shareholders are expected to benefit significantly from the merger through synergies. As a result, the majority of analysts are either recommending the stock as a “hold” or a “buy.”

Target prices

Below are some of the recommended target prices for Dow Chemical from well known brokerage firms:

  • RBC Capital Markets has issued Dow Chemical a target price of $76. The target implies a 12-month potential return of 20.0% over the closing price of $63.19 on April 27, 2017.
  • Barclays (BCS) rated Dow Chemical “equal weight” with a target price of $65. It implies a 12-month potential return of 2.9% over the closing price of $63.19 on April 27, 2017.
  • Deutsche Bank (DB) rated Dow Chemical a “buy” with a target price of $70. The target implies a 12-month potential return of 10.8% over the closing price of $63.19 on April 27, 2017.

You can indirectly hold Dow Chemical by investing in the ProShares Ultra Basic Materials (UYM). UYM invests 8.0% of its portfolio in Dow Chemical as of April 27, 2017.

In the next and final part of this series, let’s look at Dow Chemical’s latest valuations.

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