Will higher prices help Dow stage another earnings beat in Q1?

Dow (NYSE: DOW) is scheduled to announce Q1 earnings results on Thursday, Apr. 21, before market open.

The consensus EPS estimate is $ 2.05 (+ 50.7% Y / Y) and revenue estimate is $ 14.54B (+ 22.4% Y / Y).

Over the last 2 years, DOW has beaten EPS estimates 88% of the time and revenue estimates 100% of the time.

Over the last 3 months, EPS estimates have seen 9 upward revisions and 1 downward. Revenue estimates have seen 5 upward revisions and 0 downward.

DOW posted Q4 results that topped Street view, helped by higher product prices. DOW projected Q1 sales of $ 14B-14.5B.

CEO Jim Fitterling said the current inflationary environment was not a concern. “… inflation has always been a positive for our business,” he said in a post-earnings call, in which the following market drivers were highlighted:

Fitterling also said order backlogs were elevated due to logistics constraints, but pent-up demand would fulfill the backlog.

In a JP Morgan conference, DOW projected additional EBITDA upside of ~ $ 200M in Q1. It said positive macro economic activity, easing supply chain constraints and healthy industry demand will likely support a strong Q1. DOW also provided the following commentary:

Fitterling in Mar. said nuclear power is key in eliminating carbon emissions and DOW may buy electricity from 2 nuclear plants. Any updates will be of interest.

DOW last week announced a $ 3B stock buyback program, adding to its current program, which has ~ $ 775M of authorization left.

SA contributor Geoff Considine recently rated DOW Buy, owing to its solid earnings growth, especially in the post-COVID scenario.

DOW stock, which gained 19.4% YTD, underperformed the S&P 500 index in the last 1 year.

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