Is Dow (DOW) Pricing Look Attractive After Recent Share Price Rebound?

Simply Wall St.02-01 09:24

If you are wondering whether Dow's share price still reflects its underlying worth, you are not alone. This article will focus squarely on what the current market price might be implying about value. ...

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This article will focus squarely on what the current market price might be implying about value. ...</p>\n\n<a href=\"https://simplywall.st/stocks/us/materials/nyse-dow/dow/news/is-dow-dow-pricing-look-attractive-after-recent-share-price\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"DOW.AU","symbol_name":"DOWNER EDI LTD","start_time":0,"source_url":"https://simplywall.st/stocks/us/materials/nyse-dow/dow/news/is-dow-dow-pricing-look-attractive-after-recent-share-price","article_id":"2608006247","we_media_id":null,"thumbnails":["https://images.simplywall.st/asset/industry/2021000-choice1-main-header/1585186559642"],"rights":{"source":"simplywall_highlight","url":"https://simplywall.st/stocks/us/materials/nyse-dow/dow/news/is-dow-dow-pricing-look-attractive-after-recent-share-price","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2608006247","pubTimestamp":1769909071,"columns":[],"sourceInfo":{"source_id":"simplywall_highlight","name":"Simply Wall St."},"weMediaInfo":null,"summary":"If you are wondering whether Dow's share price still reflects its underlying worth, you are not alone. This article will focus squarely on what the current market price might be implying about value.\nDow recently closed at US$27.55, with a 17.8% gain over the last 30 days and a 13.5% return year to date. However, returns of a 2.5% decline over 7 days, a 24.2% decline over 1 year, a 45.1% decline over 3 years and a 36.8% decline over 5 years show a mixed picture that raises questions about...","collect":0,"end_time":0,"defaultTopTitle":"simplywall.st","property":[],"viewcount":null,"language":"en","relate_stocks":{"DOW.AU":"DOWNER EDI LTD","DOW":"陶氏化学","BK4090":"商品化工","DDM":"2倍做多道指ETF-ProShares","BK4588":"碎股","BK4585":"ETF&股票定投概念","BK7064":"综合支持服务"},"translate_title":"近期股价反弹后，道琼斯指数（DOW）的定价看起来有吸引力吗？","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"DOW.AU":1.5,"DDM":1,"DOW":1.5},"content_text":"If you are wondering whether Dow's share price still reflects its underlying worth, you are not alone. This article will focus squarely on what the current market price might be implying about value. Dow recently closed at US$27.55, with a 17.8% gain over the last 30 days and a 13.5% return year to date. However, returns of a 2.5% decline over 7 days, a 24.2% decline over 1 year, a 45.1% decline over 3 years and a 36.8% decline over 5 years show a mixed picture that raises questions about how investors are currently weighing opportunity against risk. Recent news coverage around Dow has largely focused on its role as a global materials company and how sentiment around industrial and chemical businesses has shifted over time. This context helps explain why the share price performance has varied across different timeframes and why some investors are reassessing what they want to pay for the stock. On our valuation framework Dow scores 3 out of 6 on our undervaluation checks, giving it a value score of 3/6. Next, we will walk through the main valuation approaches behind that score while also pointing you to an even more useful way of judging value at the end of the article.  Find out why Dow's -24.2% return over the last year is lagging behind its peers. AdvertisementApproach 1: Dow Dividend Discount Model (DDM) Analysis The Dividend Discount Model looks at what a stock might be worth by projecting its future dividends and discounting them back to today, then comparing that figure with the current share price. For Dow, the model uses a dividend per share of about US$1.39, a return on equity of 6.25% and a payout ratio of about 151%. That payout ratio is higher than 100%, which means recent dividends were larger than earnings. As a result, the model calculates a negative long term growth rate of about 3.2%, based on the formula shown: Calculated (1 - Payout Ratio) x ROE, (1 - 151.19%) x 6.25%. Putting these inputs together, the DDM output suggests an intrinsic value of around US$12.59 per share. Compared with the recent share price of US$27.55, this implies the stock is about 118.8% above that estimate, so on this model Dow screens as expensive rather than cheap. Result: OVERVALUED Our Dividend Discount Model (DDM) analysis suggests Dow may be overvalued by 118.8%. Discover 871 undervalued stocks or create your own screener to find better value opportunities. DOW Discounted Cash Flow as at Feb 2026 Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Dow. Approach 2: Dow Price vs Sales For companies like Dow, where earnings can move around with the economic cycle, the P/S ratio is often a useful cross check because revenue tends to be less volatile than profit. It helps you see what investors are paying for each dollar of sales, regardless of short term swings in margins. The “right” P/S ratio usually reflects what the market expects for future growth and how much risk it sees in those cash flows. Higher growth and lower perceived risk can support a higher P/S, while lower growth or higher risk usually point to a lower P/S being reasonable. Dow currently trades on a P/S of 0.49x. The Chemicals industry average is 1.14x, and the peer group used here sits around 0.67x. Simply Wall St’s Fair Ratio for Dow is 0.88x, which is its proprietary estimate of what a balanced P/S might look like once you factor in earnings growth, profit margins, industry, market cap and company specific risks. This Fair Ratio is more tailored than a simple peer or industry comparison because it ties the multiple more closely to Dow’s own fundamentals rather than assuming all chemical stocks deserve similar valuations. With the Fair Ratio of 0.88x higher than the current 0.49x, Dow screens as undervalued on this approach. Result: UNDERVALUED NYSE:DOW P/S Ratio as at Feb 2026 P/S ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1420 companies where insiders are betting big on explosive growth. Upgrade Your Decision Making: Choose your Dow Narrative Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which are simply your story about Dow, written in numbers through your own fair value, revenue, earnings and margin assumptions. A Narrative connects what you believe about the business, for example how its materials portfolio, industry position or risks might play out, directly to a financial forecast and then to a fair value that you can compare with the current share price. You can build and track these Narratives on Simply Wall St within the Community page, where millions of investors share their views, and the platform automatically refreshes each Narrative when new information such as earnings releases or news is added. This can help you monitor how your view compares with the market price over time. You may see a wide range of Narratives on Dow, from investors who assume a relatively low fair value with flat revenue and tight margins, through to those who see a higher fair value based on different assumptions about revenue, margins and the company’s prospects. Do you think there's more to the story for Dow? Head over to our Community to see what others are saying! NYSE:DOW 1-Year Stock Price Chart  This article by Simply Wall St is general in nature. We provide commentary based on historical data\n    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\n    financial situation. We aim to bring you long-term focused analysis driven by fundamental data.\n    Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.\n    Simply Wall St has no position in any stocks mentioned.New: Manage All Your Stock Portfolios in One PlaceWe've created the ultimate portfolio companion for stock investors, and it's free.• Connect an unlimited number of Portfolios and see your total in one currency• Be alerted to new Warning Signs or Risks via email or mobile• Track the Fair Value of your stocksTry a Demo Portfolio for FreeHave feedback on this article? Concerned about the content? Get in touch with us directly. 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