Strait of Hormuz Recovery Takes Longer Than Expected
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy DOW?
Source: CNBC
- Logistical Recovery Challenges: Dow CEO Jim Fitterling indicated that even if the Strait of Hormuz were to reopen today, clearing the logistics backlog could take over 275 days, highlighting the complexity and duration of the recovery process.
- Significant Market Impact: Since the closure of the Strait in early March, 20% of global oil capacity and 50% of ethylene and polyethylene production have been affected, leading to a tight petrochemical supply chain that directly impacts the production of everyday plastic products.
- Surge in Pricing Trends: Due to supply constraints, prices increased by 10 cents per pound in March, followed by a 30-cent rise in April and an expected 20-cent increase in May, marking the most significant price uplift seen in over a decade, which further supports Dow's financial performance.
- Strong Stock Recovery: Dow reported solid revenue and a smaller-than-expected loss in its first-quarter report, with shares surging approximately 65% this year, reflecting market confidence in its future performance.
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Analyst Views on DOW
Wall Street analysts forecast DOW stock price to fall
14 Analyst Rating
1 Buy
12 Hold
1 Sell
Hold
Current: 38.660
Low
22.00
Averages
27.83
High
32.00
Current: 38.660
Low
22.00
Averages
27.83
High
32.00
About DOW
Dow Inc. serves as a holding company for The Dow Chemical Company and its subsidiaries. The Company conducts its operations through six global businesses, which are organized into segments, such as Packaging & Specialty Plastics, Industrial Intermediates & Infrastructure and Performance Materials & Coatings. Packaging & Specialty Plastics segment consists of two integrated global businesses: Hydrocarbons & Energy and Packaging and Specialty Plastics. This segment employs a polyolefin product portfolio. Industrial Intermediates & Infrastructure segment consists of two customer-centric global businesses: Industrial Solutions and Polyurethanes & Construction Chemicals that develop intermediate chemicals that are essential to manufacturing processes, as well as downstream, customized materials and formulations that use advanced development technologies. Performance Materials & Coatings segment consists of two global businesses: Coatings & Performance Monomers and Consumer Solutions.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Logistical Recovery Challenges: Dow CEO Jim Fitterling indicated that even if the Strait of Hormuz were to reopen today, clearing the logistics backlog could take over 275 days, highlighting the complexity and duration of the recovery process.
- Significant Market Impact: Since the closure of the Strait in early March, 20% of global oil capacity and 50% of ethylene and polyethylene production have been affected, leading to a tight petrochemical supply chain that directly impacts the production of everyday plastic products.
- Surge in Pricing Trends: Due to supply constraints, prices increased by 10 cents per pound in March, followed by a 30-cent rise in April and an expected 20-cent increase in May, marking the most significant price uplift seen in over a decade, which further supports Dow's financial performance.
- Strong Stock Recovery: Dow reported solid revenue and a smaller-than-expected loss in its first-quarter report, with shares surging approximately 65% this year, reflecting market confidence in its future performance.
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- Significant Performance Improvement: Dow Inc. has experienced a staggering 950% increase in its current year earnings estimate over the past 60 days, reflecting a robust recovery in its materials science business, likely boosting investor confidence.
- Stable Growth Trend: CF Industries Holdings, Inc. has seen its current year earnings estimate rise by 44.2% in the last 60 days, indicating sustained demand in the ammonia market, which could lead to substantial profits for the company.
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- IPO Performance: X-energy's stock opened at $30.11 during its IPO, a 26% increase from the $23 pricing, indicating strong market interest and confidence in the nuclear sector amid the electrification trend.
- Record Financing: The IPO raised over $1 billion, marking the largest public offering in nuclear history, reflecting investors' high regard for advanced reactor technology and expectations for future market potential.
- Technology and Market Positioning: The xe-100 reactor has a generation capacity of 80 megawatts and can be scaled up to 960 megawatts, suitable for both electricity generation and hard-to-decarbonize industrial applications, highlighting its strategic significance in the energy transition.
- Partnerships and Development Plans: The company has established an order pipeline exceeding 11 gigawatts with partners like Amazon and Dow, and plans to begin construction of its fuel fabrication facility in Tennessee in 2025, indicating a long-term strategic focus in the nuclear market.
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- Logistical Recovery Challenges: Dow CEO Jim Fitterling indicated that even if the Strait of Hormuz were to reopen today, clearing the logistics backlog could take over 275 days, highlighting the complexity and duration of the recovery process.
- Significant Market Impact: Since the closure of the Strait in early March, 20% of global oil capacity and 50% of ethylene and polyethylene production have been affected, leading to a tight petrochemical supply chain that directly impacts the production of everyday plastic products.
- Surge in Pricing Trends: Due to supply constraints, prices increased by 10 cents per pound in March, followed by a 30-cent rise in April and an expected 20-cent increase in May, marking the most significant price uplift seen in over a decade, which further supports Dow's financial performance.
- Strong Stock Recovery: Dow reported solid revenue and a smaller-than-expected loss in its first-quarter report, with shares surging approximately 65% this year, reflecting market confidence in its future performance.
See More
Dow Inc. Q1 2026 Earnings Call Highlights
- Sales Growth: Dow Inc. reported net sales of $9.8 billion in Q1 2026, reflecting a 3% sequential increase, with operating EBITDA at $873 million, indicating a significant rebound in market demand amid supply chain disruptions caused by the Middle East conflict.
- Future Outlook: The company anticipates approximately $12 billion in revenue and $2 billion in EBITDA for Q2, with management expressing optimism that this growth will offset rising feedstock and energy costs, showcasing confidence in market demand.
- Leadership Transition: Effective July 1, Karen will assume the role of CEO, marking a significant leadership change after a deliberate multi-year succession process, aimed at further advancing the company's strategic objectives.
- Cash Flow Management: Dow ended Q1 with over $4 billion in cash and approximately $14 billion in total liquidity, demonstrating strong financial health in a volatile market environment.
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