6 days ago
DOW Agrees to Divest 50% Ownership in DowAksa Joint Venture
Dow Inc. DOW signed an agreement to sell its 50% interest in DowAksa Advanced Composites Holdings BV (DowAksa) to the other 50% joint venture partner, Aksa Akrilik Kimya Sanayii A.S.
The sale proceeds are estimated to be $125 million, which will be used to support DOW's balanced capital allocation approach. This reflects an enterprise value of around 10x the estimated 2025 operating EBITDA.
The sale of the stake in the joint venture created in 2012 is expected to close in the third quarter of 2025. DOW's decision to exit is rooted in its best-owner mindset strategy of focusing on its core, high-value downstream businesses.
DOW stock has lost 47.1% over the past year compared with the industry's 24.9% decline.
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Dow, on its first-quarter call, said that it remains committed to disciplined execution and increased actions to boost profitability and support cash flow. It continues to take actions to address heightened macroeconomic and geopolitical uncertainties. Dow has delayed the construction of the Fort Saskatchewan Path2Zero project amid the prevailing market conditions.
Also, it is expanding the earlier announced review of European assets, mainly in polyurethanes, to address the challenging demand conditions and regulatory environment in the region. These new and earlier announced actions are expected to deliver roughly $6 billion in cash support.
DOW currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the Basic Materials space are Akzo Nobel N.V. AKZOY, Newmont Corporation NEM and Balchem Corporation BCPC. While AKZOY and NEM currently sport a Zacks Rank #1 (Strong Buy) each, BCPC carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Akzo Nobel's current-year earnings is pegged at $1.64 per share, implying a 17.14% year-over-year increase. Its earnings beat the Zacks Consensus Estimate in three of the trailing four quarters while missing once.
The Zacks Consensus Estimate for NEM's current-year earnings is pegged at $3.92 per share, indicating a 12.64% year-over-year earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, with an average surprise of 32.41%. NEM's shares have gained 40.1% in the past year.
The Zacks Consensus Estimate for BCPC's 2025 earnings is pegged at $5.15 per share, indicating a rise of 31% from year-ago levels. The company's earnings beat the consensus estimate in two of the trailing four quarters while missing the rest. Its shares have gained 8.8% in the past year.
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