Wall Street welcomes new Dow

The new Dow, the former Materials Science division of DowDuPont, has spun off with a welcoming reception on its first day of trading on 2 April, jumping 5% to close at $56.25. Wall Street analysts are looking to Dow’s sector-high dividend yield, potential trough-like Q1 earnings implying upside ahead and a highly disciplined capital allocation approach as major positives. On the downside, slowing global economic growth, especially in Europe and China, and overcapacity in key product polyethylene (PE) amid the wave of US expansions serve as formidable headwinds. Yet new Dow’s debut coincided with stronger manufacturing Purchasing Managers’ Index (PMI) figures from China and the US for March, which gave it a lift.