BofA downgrades Dow to Underperform citing chemical oversupply and earnings risks

BofA Securities downgraded Dow Inc. to Underperform from Neutral due to concerns about structural oversupply in the chemical industry and an unsustainable earnings environment despite a 71% stock rise this year. The firm highlighted challenges in forecasting 2026 earnings, noting temporary gains from geopolitical tensions like the Iran conflict but expects petrochemical prices to weaken after peaking in Q2 2026. BofA anticipates a market normalization with focus shifting to sustainable earnings and expects no major capacity cuts from the conflict, which may pressure prices further. This outlook suggests downside risk for Dow's stock over the next 12 months.