Dow Inc. (DOW): A Bull Case Theory

We came across a bullish thesis on Dow Inc. on r/valueinvesting by ValueContrarian101. In this article, we will summarize the bulls’ thesis on DOW. Dow Inc.'s share was trading at $27.16 as of January 28th. DOW’s trailing and forward P/E were 32.65 and 13.61 respectively according to Yahoo Finance.

DOW Inc., a leading global chemical company with production facilities and customers worldwide, is trading at multiyear lows, creating a potentially compelling investment opportunity. Despite the sector’s prolonged downturn and widespread negative sentiment around major chemical players such as BASF, Celanese, Evonik, and Lyondell, DOW’s fundamentals remain resilient.

The company maintains a manageable debt profile, even after halving its dividend, and continues to benefit from high barriers to entry, cost-efficient production, and a strong portfolio of chemical-relevant patents, giving it a durable economic moat.

This combination of scale, intellectual property, and global footprint positions DOW to outperform once the sector recovers. Historically beaten-down and overlooked stocks with durable competitive advantages, as value investors like Bruce Greenwald highlight, often present attractive entry points, and DOW exemplifies this thesis. The recent lows appear to offer investors a favorable risk/reward profile, as the market has largely discounted the company’s underlying strengths and long-term growth potential.

While cyclical headwinds have weighed on short-term performance, DOW’s operational efficiency, global reach, and strategic positioning in essential chemical markets suggest that it is well-positioned to generate value for shareholders once industry conditions stabilize. For investors seeking exposure to a high-quality chemical company with a moat trading at an attractive valuation, DOW presents a rare opportunity to capitalize on market pessimism and capture upside as the sector gradually recovers.

Previously, we covered a bullish thesis on Eastman Chemical Company (EMN) by Necessary-Damage5658 in November 2024, which highlighted its compliance-driven positioning and ability to capture market share amid export control changes. EMN’s stock price has depreciated by approximately 31.74% since our coverage due to sector headwinds. ValueContrarian101 shares a similar view but emphasizes DOW Inc.’s low valuation, economic moat, and global scale for long-term upside.

Dow Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 39 hedge fund portfolios held DOW at the end of the third quarter which was 40 in the previous quarter. While we acknowledge the risk and potential of DOW as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than DOW and that has 10,000% upside potential, check out our report about this cheapest AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy NOW 

Disclosure: None.