Nomura analyst Aleksey Yefremov sees the valuations as "encouraging" vs. more defensive chemicals and the broader market, and select commodity prices are confirming better macro data but large supply additions "are a limiting factor on how high stocks can go."
China macro data continued to improve recently and valuations for Nomura's upgrades are below cycle-average, Yefremov says.
On Dow Inc., "don’t count on a big buyback in 2019, but Dow has the strongest [free cash flow] yield potential among cyclical names in our coverage in 2020 as restructuring costs decline," Yefremov writes.
Now read: Dow: Question The Dividend »
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