The firm upgraded Dow to overweight from neutral and maintained its price target of $55.
Now is the time to buy the dip in chemical company Dow Inc. , says JPMorgan. The bank upgraded Dow to overweight from neutral and maintained its price target of $55, implying shares can gain 9.5% from where they closed Friday. "We think the recent downward movement in equity values has given investors an opportunity to purchase Dow shares at a reasonable valuation," analyst Jeffrey Zekauskas wrote in a Monday note.
But the company's equity value could still increase along with its payout, he noted. The analyst said Dow has underperformed chemical company LyondellBasell this year and over the past 12 months because of its dividend. Dow's dividend is flat, while Lyondell's dividend has increased by 19% since February 2021, according to the note. "We think there is room for Dow to raise its dividend given its strong cash flows even at depressed parts of the economic cycle," he said.
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