Al Root
Shares of commodity chemical makers Dow and LyondellBasell have been upgraded to Buy after a horrible day.
Investors' worst fears may be misplaced.
On Wednesday, Dow stock dropped 5.1%, and LyondellBasell Industries fell 7.5%. The stocks closed off their lows, but at points in the day, Lyondell shares were on pace for their worst day since March 2020, according to Dow Jones Market Data.
Oil prices were the culprit, plunging after President Donald Trump's Tuesday announcement of a two-week cease-fire in Iran.
The Iran war gave the commodity chemical business a much-needed boost. Rising oil prices help both Dow and Lyondell, which make a majority of their products from relatively lower-cost natural gas. What's more, the conflict also took Middle Eastern commodity chemicals capacity offline.
The war's end threatens to undo all that. But "the market is underestimating both the duration of disruption and the earnings power embedded in a higher-for-longer [chemical] pricing environment," wrote Alembic analyst Hassan Ahmed on Thursday. He upgraded both stocks to Buy from Hold. His Dow price target rose to $50 from $35. His Lyondell target rose to $100 from $66.
Dow stock was up 0.8% in premarket trading at $39.60, while S&P 500 and Dow Jones Industrial Average futures were down about 0.3%. Lyondell stock was up 1% at $74.95.
"Our constructive stance is anchored on four key pillars: a prolonged supply chain normalization, a structural risk premium in oil and chemicals, accelerating capacity rationalization, and still-conservative forward estimates," added Ahmed.
With the ratings changes, Dow and Lyondell have received a combined nine new Buy ratings since the conflict began.
Still, sentiment remains low. Overall, 22% of analysts covering Lyondell rate shares Buy, and 32% rate Dow stock Buy. The average Buy-rating ratio for stocks in the S&P 500 typically ranges from 55% to 60%.
Analysts have been waiting for a long time for things to improve. Dow earned an operating profit of $9.5 billion in 2021. It earned less than $500 million in 2025.
Things are finally looking up. Now, Wall Street is wrestling with the sustainability of an upturn.
Write to Al Root at allen.root@dowjones.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
April 09, 2026 10:12 ET (14:12 GMT)
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