DOW - Dow Chemours Celanese downgraded as BofA cuts estimates
2023-06-22 09:12:34 ET
Dow Inc. ( NYSE: DOW ), Chemours ( CC ) and Celanese ( CE ) on Thursday were downgraded by analysts at Bank of America Securities who also lowered their earnings estimates for makers of commodity chemicals.
BofA cut its investment rating for Dow ( DOW ) to Underperform from a prior rating of Neutral, and lowered Chemours ( CC ) and Celanese ( CE ) to Neutral from a prior rating of Buy.
“We acknowledge that these ratings decisions are late in the cycle, but we see valuations as continuing to reflect a recovery that has been elusive,” Steve Byrne, analyst at BofA, said in a June 22 report. “With many businesses seasonally slowing in 4Q, it may turn out to be a lost year for many our chemical chains.”
Earlier this year, BofA had been more optimistic that demand for chemicals would be stronger as China scaled back its restrictive pandemic lockdowns that had impaired business activity. A “more comprehensive stimulus package from China” may benefit chemical makers, BofA said.
“After a temporary respite in March, global commodities markets have softened through late April into May,” according to BofA. “This isn’t across all commodities in all markets, but is pervasive enough to be causing incremental headwinds for U.S.-listed chemical companies.”
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Dow, Chemours, Celanese downgraded as BofA cuts estimates