Piper Sandler initiated Dow Inc. with a Overweight rating and $78 target on the company’s stock.
Our view of the stock is Slightly Bearish with a score of 3 out of 10, where 0 is very bearish and 10 very bullish.
What to like:
High market capitalization This is one of the largest entities in its sector and is among the top quartile. Such companies tend to be more stable. Positive cash flow The company had positive total cash flow in the most recent four quarters. Positive free cash flow The company had positive total free cash flow in the most recent four quarters.
What to not like:
Poor risk adjusted returns This company is delivering below median risk adjusted returns in its peers. Even if it is outperforming on returns , the returns are unpredictable. Proceed with caution. Below median dividend returns The company’s average income yield over the past 5 years has been low compared to its peers. However, it is not a problem if you are not looking for income. Overpriced compared to book value The stock is trading high compared to its peers median on a price to book value basis. Poor capital utilization The company management has delivered below median return on invested capital in the most recent 4 quarters compared to its peers. Highly leveraged The company is in the bottom half compared to its sector peers on debt to equity and is highly leveraged. However, do check the news and look at its sector and management statements. Sometimes this is high because the company is trying to grow aggressively. Low Earnings Growth This stock has shown below median earnings growth in the previous 5 years compared to its sector Low Revenue Growth This stock has shown below median revenue growth in the previous 5 years compared to its sector.
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