The Dow Chemical CompanyDOW

Morningstar Rating

Stock Research and Analysis

by Ben Johnson

After dealing with a pair of major setbacks--namely, the worst recession since the Great Depression and a joint-venture partner getting cold feet just before closing on a $9.5 billion deal--Dow Chemical's transformation is back on track. With a K-Dow-style Read more

Bulls Say

Dow and Monsanto MON expect to launch their game-changing SmartStax corn trait package on more than 4 million acres in the U.S. in 2010.

Dow has a good track record extracting synergies from acquisitions and is already on pace to hit its synergy targets for the Rohm and Haas purchase.

Because a good deal of Dow's projected cost savings will come from structural moves such as head-count reductions and permanent plant closures, we expect the majority of them will hold. Read more

Bears Say

An onslaught of ethylene capacity is being built in the Middle East. This wave of new supply could weigh on profitability for the entire industry.

The recent departure of Pierre Brondeau--a legacy Rohm and Haas executive who had been appointed CEO of Dow Advanced Materials following the acquisition--underscores the integration risk Dow faces as it continues to fold in Rohm's operations.

A U.S. cap-and-trade regime could serve to drive up feedstock and energy costs for Dow's domestic operations. Read more

Strategy

In the near term, Dow's energies will be focused on following through on its asset-light strategy, delivering on cost-cutting goals, and successfully integrating Rohm and Haas' operations. These are Read more

Management

Andrew Liveris took the top spot at Dow Chemical in November 2004. Liveris, a 32-year Dow veteran, had previously served as COO, a role he assumed in 2003. We view Dow's compensation policies as reasonable and believe management is properly motivated Read more

Profile

Dow Chemical is one of the largest chemical producers in the world. The firm produces a wide array of products ranging from raw materials used in semiconductor manufacturing, Read more

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