Bear of the Day: Dow (DOW)

Dow Inc. (DOW) is struggling with uncertainty around tariffs and challenging industry conditions. This Zacks Rank #5 (Strong Sell) recently cut its quarterly dividend by 50%.

Dow is a materials science company, and has customers in areas such as packaging, infrastructure, mobility and consumer applications. It operates manufacturing facilities in 30 countries.

Dow Missed on Q2 Earnings By 282%

On July 24, 2025, Dow reported its second quarter results and missed the Zacks Consensus by $0.31. Earnings were a loss of $0.42 compared to the Zacks Consensus of a loss of $0.11. That’s a miss of 282%.

It has missed 2 out of the last 4 quarters.

Net sales fell 7% to $10.1 billion with declines in all operating segments. Sequentially, net sales were down 3%.

Volumes were also down 1%, as gains in the US and Canada were more than offset by declines in India, the Middle East, Africa and Europe.

Local price was down 7% year-over-year with declines in all regions and operating segments.

Cash from operating activities was negative $470 million, and down $1.3 billion year-over-year, led by lower earnings from margin compression.

Dow Cuts the Dividend by 50%

On July 24, 2025, on the same day as it reported Q2 earnings, Dow also announced its Board of Directors had declared a quarterly dividend of $0.35 per share.

That was a dividend cut of 50% in response to the prolonged industry downturn.

Dow said the cut would enhance financial flexibility amidst the continuing challenging macroeconomic environment.

If that holds annually, it would be $1.40 a share and would still be yielding 5.5%.

It is still the 456^th consecutive dividend it has paid since 1912. That’s an impressive record, through 2 world wars, a Great Depression and Great Recession and other economic and geopolitical challenges.

Analysts Are Bearish on 2025 and 2026

It should not be a surprise, with the big earnings miss and the dividend cut, that the analysts are bearish on Dow. Estimates had already been cut earlier this year, but they’ve been cut again.

1 earnings estimate was cut in the last 7 days, and 3 in the last 30 days, for 2025. That has pushed down the 2025 Zacks Consensus to $0.24 from $0.38 just a month ago.

That’s an earnings decline in 2025 of 86% as the company made $1.71 last year.

Here’s what it all looks like on the price and consensus chart.

Shares of Dow Sink Over the Last Year

The shares have been weak for some time. Dow has sunk to 1-year, and also, 5-year, lows.

With earnings sinking, the stock is not cheap on either a price-to-earnings (P/E) basis or on a PEG ratio basis.

It trades with a forward P/E of 107 and has a PEG ratio, which measures the P/E divided by growth, of 11.3. A P/E under 15 and a PEG ratio under 1.0 indicate value.

This has been a tough year for Dow. Investors might want to wait on the sidelines for a sign of a turnaround in the earnings before jumping in.

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This article originally published on Zacks Investment Research (zacks.com).

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