Dow Inc. Just Missed Earnings - But Analysts Have Updated Their Models

As you might know, Dow Inc. (NYSE:DOW) recently reported its annual numbers. Revenues were in line with forecasts, at US$43b, although statutory earnings per share came in 15% below what the analysts expected, at US$1.57 per share. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

Check out our latest analysis for Dow

Taking into account the latest results, Dow's 15 analysts currently expect revenues in 2025 to be US$43.0b, approximately in line with the last 12 months. Statutory earnings per share are forecast to dip 2.6% to US$1.53 in the same period. In the lead-up to this report, the analysts had been modelling revenues of US$43.2b and earnings per share (EPS) of US$2.46 in 2025. So there's definitely been a decline in sentiment after the latest results, noting the large cut to new EPS forecasts.

It might be a surprise to learn that the consensus price target was broadly unchanged at US$46.00, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Dow analyst has a price target of US$65.00 per share, while the most pessimistic values it at US$38.00. Analysts definitely have varying views on the business, but the spread of estimates is not wide enough in our view to suggest that extreme outcomes could await Dow shareholders.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Dow's revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 0.2% growth on an annualised basis. This is compared to a historical growth rate of 1.9% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.4% per year. Factoring in the forecast slowdown in growth, it seems obvious that Dow is also expected to grow slower than other industry participants.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Dow. Fortunately, the analysts also reconfirmed their revenue estimates, suggesting that it's tracking in line with expectations. Although our data does suggest that Dow's revenue is expected to perform worse than the wider industry. The consensus price target held steady at US$46.00, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Dow. Long-term earnings power is much more important than next year's profits. At Simply Wall St, we have a full range of analyst estimates for Dow going out to 2027, and you can see them free on our platform here..

And what about risks? Every company has them, and we've spotted 2 warning signs for Dow you should know about.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.