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Dow Transformation Remains 'On Track'

Wed, 09/23/2009 - 4:40am

PITTSBURGH (AP) — Shares of Dow Chemical Co. climbed Tuesday as an analyst raised his price target for the company's shares, saying the chemical manufacturing giant's transformation remains on track.

In a note to investors, UBS analyst Don Carson boosted his price target for the Midland, Mich.-based company's shares to $33 from $25. He also raised his estimate for Dow Chemical's 2010 earnings before interest, taxes, depreciation and amortization by $174 million to $6.86 billion.

Dow's quarterly interest expense will be $400 million in 2010, versus $525 million in the second quarter of 2009, due to recent refinancings and an ahead-of-schedule bridge loan payoff, he wrote. It also recently closed on its calcium chloride and Total Raffinaderij Nederland N.V. refinery asset sales.

"All these actions provide ample liquidity and give Dow the 'right to be patient' in selling other assets such as a complete or partial monetization of Dow AgroSciences," Carson wrote.

Dow said late last year it planned to slash 5,000 full-time jobs — about 11 percent of its total work force — close 20 plants and sell several businesses to rein in costs amid the recession.

The company expects "the new Dow" to consist of three units: joint ventures; performance products; and health and agriculture, advanced materials and other market-facing businesses.

Shares of Dow rose 95 cents, or 3.7 percent, to $26.95 in afternoon trading.

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