Dow Inc. started as Top Pick, DowDupont downgraded at RBC

Apr. 16, 2019 9:17 AM ETDow Inc. (DOW), DDDD, DOWBy: Carl Surran, SA News Editor13 Comments

Dow Inc. (NYSE:DOW) is "the ultimate commodity cash machine" with an improving free cash flow profile and a commitment to capital return, RBC analysts say in initiating coverage as a Top Pick with a $68 price target.
RBC cites Dow's ~54% EBITDA exposure to trough price-to-earnings conditions; Dow realizing benefits from de-bottlenecking of several facilities; low-cost feed advantage; a potential global cyclical upturn in ethylene; low capex spend as no large-scale M&A or greenfield expansion; and impressive value return to shareholders.
Meanwhile, the firm downgraded DowDupont (NYSE:DWDP) to Sector Perform from Top Pick, pointing to macroeconomic concerns for the chemical maker.