Shares of Dow Inc. DOW fell 0.8% in afternoon trading Thursday, but pared an earlier loss of as much as 3.2%, in the wake of a bearish call from analyst Steve Byrne at BofA Securities. Byrne cut his rating on the chemicals and specialty materials company to underperform from neutral, and cut his stock price target to $55 from $64, saying his anticipated demand recovery “has remained elusive” and is hurting prices. “In the petrochemical space US and global polyethylene volumes are not rebounding as expected,” Byrne wrote in a note to clients. “In Europe demand seems to be going in reverse once again, while China demand may be growing but is offset by increased capacity.” While he believes polyethylene (PE) volumes have already bottomed in the U.S., the rebound is largely supported by export sales at “much lower” prices. Dow’s stock, which has a relatively high dividend yield of 5.44%, has edged up 2.1% year to date, while the S&P 500 SPX, which has an implied yield of 1.57%, has advanced 14.0%.
Market Pulse Stories are Rapid-fire, short news bursts on stocks and markets as they move. Visit MarketWatch.com for more information on this news.
