Market Overview

PreMarket Prep Stock Of The Day: Dow

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PreMarket Prep Stock Of The Day: Dow

Two catalysts are moving shares of Dow Inc. (NYSE: DOW) higher, making it the PreMarket Prep Stock Of The Day.

Not Your Grandparents Dow: Dow Chemical Company was founded in 1897 by chemist Herbert H. Dow to supplement the Midland Chemical Company (1890) and the Dow Process Company (1895).

On Sept. 1, 2017, DowDuPont announced the completion of the merger of equals between Dow Chemical Company and E.I. du Pont de Nemours.

On April 1, 2019, DowDuPont completed the first step with the spin-off of its materials science business, “Dow.” DowDuPont affected the spin-off by distributing all of the then-issued and outstanding shares of Dow to its stockholders. DowDuPont stockholders were entitled to receive 1 share of Dow Inc.

Early Promise But A Rough Start: Dow traded higher in the last eight sessions of March ahead of the April 1 re-debut, making its high on March 20 ($53.50) and then declined to $48. On the first day of heavy volume, it rallied from $51.63 to $53.50.

In April, it made its all-time high at $60.52 and retreated to end the month at $56.73. It managed to end 2019 above $50 at $54.73. However, it fell out of favor in January and got smashed with the rest of the market in March, falling to $21.95 and then rallied to end the month at $29.24.

Following The Market Higher: The issue has caught a bid right along with the broad market, and is in the midst of a six-month winning streak. It peaked a few weeks after the broad market at $51.56 and posted its highest close since January ($51.07) on Sept. 15.

The pullback off that high came to an end when it put in a pair of lows on Sept. 24 ($45.69) and Sept. 25 ($45.63). On Monday, it rallied to $48.28, but declined to end Tuesday’s session at $46.54.

Double Catalyst: Before the open, the company announced it was taking action to rationalize certain manufacturing assets that are expected to result In total annualized EBITDA savings of more than $300 million by end of 2021 and will achieve a reduced target of $1.25B for capital expenditures In 2020. Also, Morgan Stanley raised its price target from $45 to $52.

Price Action: After a higher open, Dow had a brief retreat but found support well ahead of Tuesday’s close ($46.47) at $47 and resumed its move higher. The ensuing rally has found sellers just ahead of Monday’s high ($48.28), only reaching $48.12 and reversed course.

As of 12 p.m. ET, it has been trending towards the low of the day.

 

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