Citigroup Reiterates Buy, $33 PT on Dow Chemical

Citigroup maintains its Buy rating and $33 target price on The Dow Chemical Company

as 4Q soft patch creates buying opportunity for long-term holders. Citi comments, “DOW has seen sequential softening in Europe since October and slowing demand in chlor-alkali & electronics. Management has responded aggressively to slowing demand by shutting down 30 small plants and doubling its cost reduction target to $500mm for next year. These 30 shutdowns (out of 900 total plants) compare to 250 shutdowns in late 2008. Despite near-term headwinds, management stood by its near-term $10B EBITDA target. Beyond that, management expects $2.5B of incremental EBITDA from shale gas (doable), and $2B from innovation.” DOW closed at $26.77 per share on Thursday.