Dow Inc. closed at $23.11, marking a 1.09% increase, outpacing the S&P 500’s 0.09% loss. In the same session, the Dow index decreased by 0.38%, while the Nasdaq increased by 0.13%.
In the past month, Dow Inc.’s shares rose by 3.44%, trailing behind the Basic Materials sector’s 3.88% gain but outperforming the S&P 500’s 1.89% rise. There is heightened anticipation for Dow Inc.’s upcoming earnings report, with projected revenue of $9.53 billion, an 8.45% decrease from the same quarter the previous year.
Annual Forecasts And Analyst Estimates
Annual forecasts for Dow Inc. include earnings of -$0.99 per share and revenue of $40.03 billion, representing declines of 157.89% and 6.82%, respectively, from last year. Changes in analyst estimates are essential to gauge immediate business trends, with positive revisions often reflecting a favourable business outlook.
The Zacks Rank system, a notable evaluation method from #1 (Strong Buy) to #5 (Strong Sell), demonstrates reliable performance, with #1 stocks averaging annual returns of +25% since 1988. Recently, Zacks’ consensus EPS estimate for Dow Inc. increased by 0.55%, placing the company at a Zacks Rank #3 (Hold).
Based on the stock’s recent performance, we see a company outperforming the broader market on a daily and monthly basis. DOW’s shares are holding up better than the S&P 500, even while trailing its specific sector. This resilience suggests some underlying support for the stock price ahead of its earnings release.
The upcoming earnings report presents a significant risk, with forecasts pointing to a major decline. We are anticipating revenue to fall by over 8% from last year’s quarter and for the full year to result in a net loss per share. This sharply negative year-over-year comparison is the primary bearish signal traders should be watching.
Despite the bleak annual forecast, there has been a slight upward revision in earnings estimates over the last 30 days. This indicates a small pocket of recent optimism among analysts. Traders should view this as a conflicting signal that could create volatility around the earnings announcement.
Broader Economic Factors
Looking at the broader economy, we see that falling oil prices in the fourth quarter of 2025 have provided some relief on input costs for chemical companies. This macro trend may be what is driving the minor positive estimate revisions. However, this relief on the cost side might not be enough to offset weaker demand.
Global demand remains a concern, as we have seen global manufacturing PMIs struggle to stay above the 50-point expansion mark for much of 2025. Economic indicators from China also continue to send mixed signals, creating uncertainty around demand for basic materials. This weak demand environment supports the forecast for lower annual revenue.
The high interest rates, a legacy of the inflation we saw back in 2023, continue to suppress new construction and industrial projects. This environment of positive short-term stock momentum clashing with poor fundamental forecasts is ideal for strategies that benefit from volatility, such as straddles or strangles. This is a very different market from the post-pandemic housing boom of 2022, when demand for materials was surging.
It is critical to remember that DOW operates in an industry that is currently in the bottom 13% of all sectors we track. This suggests the headwinds facing the company are sector-wide and not isolated. This weak industry backdrop reinforces a cautious or bearish stance on any directional trades.
