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Dow Inc. stock: Impressive quarter but valuation too high now

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Goldman lowered the price target for the Dow Inc. (NYSE:DOW) stock from “a Buy” to “a Neutral”. The rating was released on May 11, 2021. The research report from Credit Suisse has resumed the stock to Neutral, with a price target set at $50. The stock was resumed by Credit Suisse, who disclosed in a research note on March 15, 2021, to Neutral and set the price objective to $50. In their research brief published March 02, 2021, Wells Fargo analysts upgraded the Dow Inc. stock from Equal Weight to Overweight with a price target of $77.


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Historical Earnings Surprises and Revenue Forecasts

Profit is the most critical financial performance measure. Every investor in a business is looking forward to the earnings report as stock price to increase when earnings exceed market expectations and progressively decrease when earnings do not meet expectations. The firm reported an earnings per share (EPS) of $1.36 during the last quarter as opposed to a consensus estimate of $1.17, which indicates the company beat its estimate by $0.19, which implies that the company surprised the market by 16.20%. It appears that the average earnings per share estimate for the current quarter (ending in Jun 2021) is $2.02. This is an average of 18 analysts’ earnings, where the high earnings per share estimate is $2.22 and the low earnings per share estimate is $1.8. According to 12 analyst estimates, an average revenue estimate of $12.64B is projected for the current quarter with a high revenue estimate of $13.08B and a low estimate of $11.4B.

The latest trade, Performances and Moving Averages give us the following Picture

The share price of Dow Inc. (NYSE:DOW) raised 0.77% to close Wednesday’s market session at $69.57, higher as compared to yesterday’s close. The stock price fluctuated between $68.21 and $69.64 throughout the trading session with the volume trading being 6051053 shares, which represented a significant variation when compared to the three months average volume of 4.62 million shares. The firm’s stock price fluctuated 1.49% within the last five trades and 11.05% within the last 30 trades, which was a significant change from the beginning of this year. Despite the fact that the share price increased 24.37% in the last 6 months and 13.40% was added to its value over the previous 3 months. DOW stock is trading at a margin of 2.74%, 6.62% and 24.34% apart from the 20-Day, 50-Day and 200-Day Simple Moving Average prices.

As of the close of trading, DOW deals in the Basic Materials domain. The stock is trading -2.54 percent below its 52-week high and 84.63 percent above its 52-week low. For example, looking both at the price and the high and low measurements of 52 weeks will give you a clearer picture of the direction the price is heading. The firm’s Weighted Alpha is 78.94. A positive weighted alpha indicates the firm has done well over the course of the year, whereas one below 0 indicates that the firm has done poorly.

What Does Dow Inc.’s Profitability and Valuation Ratios Tell Us About the Stock?

With regard to the profitability of the company, the operating margin is currently at 5.00 percent and the profit margin is 4.80 percent, and the company has reported a gross margin of 13.50 percent. The profit margin, also known as the revenue ratio or gross profit ratio, is an efficiency figure used to estimate the business’s profitability by comparing net income and sales. The higher the number, the more profits are generated for the company and vice versa.

The stock’s market cap achieved a total value of $51.54 billion as of the last trading session. Market capitalization is the total value of all outstanding shares of a corporation and it is used to measure a company’s market value. The price-to-earnings ratio for Dow Inc. (NYSE:DOW) is 26.51. The price-to-earnings ratio is a method of assessing corporate values by comparing them to their per-share profit. Forward P/E stands at 13.41. Forward price-to-earnings is calculated using predicted earnings for the next financial year’s P/E determination. The stock has achieved an effective Price-to-Sales Ratio of 1.27 that mirrors the cost to be found for sales by the market. The firm managed a Price-to-Book ratio of 3.70, which equates the market value of a stock with its book value.

Is Insider Trading a Real Thing?

Almost all investors and traders prefer to invest in shares controlled by the management of a corporation as a management company will be more likely to run the business itself and to never conduct things against the management’s desires and will always try to do what is best for their shareholders. Currently, 0.10 percent of Dow Inc. shares are owned by insiders, and 69.00 percent are held by financial institutions. Edmonds Ronald C, the Controller and Vice President at Dow Inc. (DOW) has sold 30,000 shares of firm on May 06 at a price of $68.35 against the total amount of $2.05 million. In another inside trade, HOLICKI PETER, Senior Vice President of Dow Inc. (NYSE:DOW) sold 6,836 shares of the firm on Nov 18 for a total worth of $0.38 million at a price of $55.99.

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