Dow Inc. (DOW) Gains But Lags Market: What You Should Know

Dow Inc. (DOW) closed at $35.37 in the latest trading session, marking a +0.4% move from the prior day. The stock lagged the S&P 500's daily gain of 3.06%. Elsewhere, the Dow gained 2.39%, while the tech-heavy Nasdaq added 3.95%.

Coming into today, shares of the materials science had gained 60.14% in the past month. In that same time, the Basic Materials sector gained 14.3%, while the S&P 500 gained 2.36%.

Investors will be hoping for strength from DOW as it approaches its next earnings release, which is expected to be April 30, 2020.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $2.10 per share and revenue of $38.61 billion. These totals would mark changes of -40.51% and -10.1%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for DOW. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. The Zacks Consensus EPS estimate has moved 22.62% lower within the past month. DOW is currently sporting a Zacks Rank of #5 (Strong Sell).

Valuation is also important, so investors should note that DOW has a Forward P/E ratio of 16.76 right now. For comparison, its industry has an average Forward P/E of 14.42, which means DOW is trading at a premium to the group.

We can also see that DOW currently has a PEG ratio of 5.04. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DOW's industry had an average PEG ratio of 2.05 as of yesterday's close.

The Chemical - Diversified industry is part of the Basic Materials sector. This industry currently has a Zacks Industry Rank of 226, which puts it in the bottom 12% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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