Dow Inc. upgraded to Buy as supply shocks and legal gains improve margins and cut costs.

Dow Inc. has been upgraded to a Buy rating due to improved financial stability from geopolitical supply shocks and a significant legal windfall. The company benefits from North American ethane-based production, which lowers costs compared to global oil-linked prices, boosting margins and polyethylene sales. Cost-cutting efforts, including $1 billion in annual savings and European asset rationalization, are ahead of schedule, reducing Dow's breakeven point and enhancing future profitability. Valuation is attractive with low trading multiples on depressed EBITDA, suggesting potential for multiple expansion as cost savings and normalization take effect.